Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

PRIVATE BUSINESS

CROYDON TRAMLINK BILL [Lords]

LONDON LOCAL AUTHORITIES BILL [Lords]

Read the Third time, and passed, without amendment.

HILL SAMUEL BANK AND UNITED DOMINIONS TRUST BILL [Lords]

Considered; to be read the Third time.

Oral Answers to Questions — EDUCATION

Pre-school Age Children

Ms Corston: To ask the Secretary of State for Education when he last met representatives of the National Confederation of Parent-Teacher Associations to discuss Government education policies for pre-school age children.

The Parliamentary Under-Secretary of State for Education (Mr. Robin Squire): My right hon. Friend has not met the National Confederation of Parent-Teacher Associations recently to discuss education policies for pre-school age children. Arrangements are in hand for the Minister of State to meet the NCPTA shortly. The NCPTA has requested that the meeting cover issues other than education provision for under-fives.

Ms Corston: As this may be the last appearance of the Minister and the Secretary of State for Education at the Dispatch Box, will they agree as a matter of urgency to meet parent-teacher representatives to discuss the report from the National Foundation for Educational Research which supports Labour's policy of offering nursery education to all three and four-year-olds, and which flatly rejects the Government's inadequate compromise of putting children into school a year early? What is the Government's policy on nursery education?

Mr. Squire: I am sorry that on my 50th birthday and feeling like a mere boy I should be so dismissed by the hon. Lady. We shall wait and see.
On the issue of slightly greater substance, we note that the hon. Lady has committed her party to that policy on pre-school provision without seeing the bill for it. Our policy remains clear. We wish to see an expansion of the provision for under-fives across the range of different sorts of education as and when resources are available. We shall be coming up with more developments in the near future.

Mr. Win Griffiths: I thank the Minister—

Mr. Dicks: Wish him a happy birthday, then.

Mr. Griffiths: Not only do I wish the Minister a happy birthday, I wish him many more. I was pleased to hear that there is some inkling of support for nursery education and expansion from the Government. Why will not the Government introduce targets for developing the expansion of nursery education? Will the Minister take this opportunity to repudiate the article in the Evening Standard on 29 June where Sheila Lawlor said that she feared that the introduction of universal nursery education could be one of the most disastrous social experiments of our time? I hope that he will reject that and support Labour's policy for expanding nursery education.

Mr. Squire: My understanding is that Sheila Lawlor is not currently a member of the Administration, although—referring back to the question of the hon. Member for Bristol, East (Ms Corston)—who knows? I think that it is most unlikely. The fact remains that there are Conservative councils with a proud record on nursery education and in other areas of providing playgroups, which, I remind the hon. Gentleman, some 40 per cent. of three and four-year-olds currently attend. Many of those playgroups provide an excellent service for under-fives.

Parental Choice

Dr. Wright: To ask the Secretary of State for Education if he will make a statement on the extension of parental choice of school.

The Secretary of State for Education (Mr. John Patten): The Government have given parents the right to express a preference for their choice of school, to a great deal more information and to a wider choice of schools through, for instance, the expansion of the self-governing grant-maintained sector, city technology colleges and technology colleges. Even greater diversity and choice is on the horizon with the possibility of schools specialising in other areas of study, such as languages or the arts, or selecting on grounds of aptitude and ability wholly or in part—including more grammar schools.

Dr. Wright: Does the Minister recall that, in each of the past two years, Five Ways primary school in my constituency, a successful and popular school, has had its application for expansion rejected by the Department on the ground that there are surplus places in schools within a two-mile radius? Parents and governors, having heard about the circular issued by the Department on 22 June—typically, replies were invited by 5 August—now believe that this successful school is to be allowed to expand. Are they right?

Mr. Patten: I cannot limit my discretion in the case of any school before considering it. I welcome the hon. Gentleman's question. I recall his raising it at least twice before during questions, and I believe that, in an Adjournment debate, he discussed the desire of the parents of Five Ways school to have it expanded—even though there are surplus school places and other, less popular, schools within a reasonable distance.
We shall consider any future application purely on its merits, but I applaud the way in which the hon. Gentleman is bringing to the attention of the House the fact that local parents want popular schools to expand.

Mr. Butterfill: When he next visits Bournemouth, will my right hon. Friend take the opportunity to see the wide variety of schools there? We have traditional grammar schools and comprehensive schools that are gaining better results than any others in the country, but we also have grant-maintained schools and secondary schools that offer a wide variety of vocational courses. There is also a thriving independent sector. Does my right hon. Friend agree that that is the sort of choice we need to offer parents? Will he condemn the Liberal Democratic and Labour parties for trying to close down that choice?

Mr. Patten: I have always condemned both those parties and, for good measure, I will include Plaid Cymru for wanting to close down the range of opportunities the other side of Offa's dyke. I am happy to condemn anyone else whom my hon. Friend wants me to condemn.
I am sorry to say that it is at least three weeks since I last visited my hon. Friend's constituency. I know that there is an excellent and wide range of schools in Bournemouth. Ideally, most towns would have the same range of choice. That is a great deal more difficult in rural areas, and we must bend our thoughts more towards how we can expand variety and choice in those areas and look after the small rural primary schools.

Mr. Pike: How does parents' choice square with the fact that a certain school in my constituency has to determine which children get places by drawing lots?

Mr. Patten: Nine out of 10 parents get their children into the school that they want—an extremely good piece of news—and there is an appeals mechanism for those who are dissatisfied. The hon. Gentleman is on to a good thing, however. I hope that he will lead other members of his party, including the hon. Member for City of Durham (Mr. Steinberg), who represents the NUT, to swing in behind our policy of allowing popular schools to expand and to deliver local excellence.

Grant-maintained Schools

Mr. Michael Brown: To ask the Secretary of State for Education what is the latest figure he has for the number of schools that have now voted in favour of grant-maintained status.

Mr. Patten: I am pleased to report that, to date, parents at 1,134 schools in England have voted for self-governing GM status, compared with about 350 at the time of the previous general election. Unfortunately, parents at nine out of 10 schools have not yet had the opportunity to vote in a ballot.

Mr. Brown: Is not it true that there have been few successful ballots in south Humberside because of intimidation by the NUT and by Humberside county council? Until my right hon. Friend persuades the Secretary of State for the Environment to abolish the county of Humberside, we shall have much more work to do on this score in south Humberside.

Mr. Patten: I entirely agree with what my hon. Friend says about the unfortunate situation in his area. I will convey his views to my right hon. Friend the Secretary of State for the Environment.
I agree that we have a lot more work to do—although I welcome the support for our policies that is emerging from the Opposition. For instance, I understand that the hon. Member for Peckham (Ms Harman), shadow Chief Secretary to the Treasury, is sending her son to a grant-maintained school in London in two months' time. That must make for interesting discussions in the shadow Cabinet, in which the hon. Member for Dewsbury (Mrs. Taylor), who is firmly in favour of abolishing grant-maintained schools, serves.

Mr. Jack Thompson: Is the Secretary of State aware that in Northumberland, the metropolitan boroughs of Tyne and Wear and Durham, only one school has opted out, and that was by a dubious two votes? Does not that reflect the good sense of the people of the north-east of England?

Mr. Patten: As the late Sir Winston Churchill said, one vote is enough in all circumstances, including parliamentary elections. I regret the fact that there are not more grant-maintained schools in the north-east among the 1,134 that have voted to become grant maintained, but it is entirely right and proper that parents should have the chance to express their views. If, however, those parents and those schools are subject to the type of intimidatory action, to which my hon. Friend the Member for Brigg and Cleethorpes (Mr. Brown) referred, which took place in Humberside, in County Durham and in Newcastle, supported by the National Union of Teachers on every occasion, it is not surprising that that intimidation has sometimes worked.

Sir Anthony Durant: I congratulate my right hon. Friend on the large number of schools that have become grant maintained. Will he, as a matter of urgency, consider Prospect school in my constituency, which had an outstanding ballot by the parents, and whose application the Labour party has done all that it can to block?

Mr. Patten: I shall consider the prospects for Prospect school as soon as I leave the Chamber.

Mrs. Ann Taylor: Will the Secretary of State accept the thanks of the Opposition for his attempts to trail the Labour party's education document—a document agreed by all three leadership contenders—which says that we must end GM status and abolish the Funding Agency for Schools? Will the Minister also confirm that, of the 24,706 primary and secondary schools in England and Wales, there are only 944 grant-maintained schools, which is about 4 per cent? Is not it a fitting symbol of the failure of the Secretary of State and his GM policy that, last month, not a single secondary school in the country decided to become grant maintained?

Mr. Patten: The mystery deepens, Madam Speaker. I am becoming more and more perplexed as to how it is possible for the hon. Member for Peckham, who is sending her boy to a grant-maintained school this September, to sit in the same shadow Cabinet as the hon. Member for Dewsbury, who wishes not only to abolish grant-maintained schools, but to abolish A-levels, city


technology colleges, performance tables, grammar schools, selection and almost everything else that has led to advances in children's education.

Education Association

Mrs. Lait: To ask the Secretary of State for Education when he expects to announce the use of the first education association.

Mr. Patten: I will not hesitate to transfer failing schools to education associations when appropriate. About 10 schools have been declared failing so far. A number of cases for the use of educational associations are under active consideration.

Mrs. Lait: Does my right hon. Friend agree that the issue of poorly performing schools has been swept under the carpet for too long? Can he assure me that he will be resolute in taking action against schools that fail pupils and parents, and introduce education associations as and when necessary?

Mr. Patten: When and if necessary, I will not hesitate to do so. I entirely agree that for too long information about schools was swept under the carpet. The hon. Member for Dewsbury and her Labour team oppose the regular and open inspection of schools and the publication of results. They oppose the publication of performance information for schools. They oppose giving parents the information that they need to help to promote the welfare of their children.

Mr. Jamieson: If the Secretary of State genuinely believes that education associations can combat low standards in schools, why does not he send an education association in to some of the private schools, such as Finborough school in Suffolk or Rodney school in Nottinghamshire, which receive a large proportion of their funding from the taxpayer through the service children's boarding schools allowance, and yet have the most damning inspectorate reports?

Mr. Patten: I am not aware of the reports to which the hon. Gentleman refers. I shall take the trouble to inform myself about them when I return to my Department this afternoon, because I know that the hon. Gentleman is a serious player in the education world. He is a member of the Education Select Committee which, as recently as a few weeks ago, heard a number of distinguished professors, including Professor Michael Barber, until recently a fully paid member of the NUT's team and now the professor of education at Keele, and Professor Mortimer, who said that we have to expect and demand more from children. Professor Mortimer, who is not exactly a running dog of mine and who is professor of education at the university of London, also said that, at long last, educators were looking at teaching in schools rather than at peripheral issues.

School Discipline

Mr. Simon Coombs: To ask the Secretary of State for Education what steps he is taking to help improve levels of discipline in schools.

The Parliamentary Under-Secretary of State for Schools (Mr. Eric Forth): In May, my right hon. Friend

issued to all schools guidance on pupil behaviour and discipline based on existing good practice. The guidance aims to help them to maintain and improve discipline.

Mr. Coombs: Is my hon. Friend aware that the added emphasis on the important role of parents in disciplinary matters has been widely welcomed? How does he envisage that role being expanded? What experience does he have of other European Governments' attempts to tackle the important problem of maintaining discipline in schools so that children have the right environment in which to learn?

Mr. Forth: My hon. Friend makes two valuable points. We should always learn from others when that is appropriate, but I suspect that in this area, where so much is bound up in tradition and custom and in the approach of individual countries, what is done in other countries—no matter how excellent it may seem—may not in any sense be directly transferable to this country, but I would never rule it out.
My hon. Friend's point about parents is good. We have done everything possible to encourage parental involvement in schools, whether through parents being governors or through joining parent-teacher associations and so on. Their involvement in discipline is the key. We cannot expect teachers and head teachers to deal with discipline without the support of parents. Unless parents are whole-heartedly prepared to support what goes on in schools, we shall win only half the battle.

Mr. Bryan Davies: Does not good discipline start at the top? What is the world of education to make of a Secretary of State who plays truant during major stages of the Education Bill, who shows such a lack of self-discipline that he ends up in court, and who is rapidly becoming the Maradona of British politics? Is not it about time that he was shown the red card and sent home?

Mr. Forth: That ill-conceived question shows the absolute and desperate paucity of the Opposition's thoughts on education. We hear nothing from them about policy, about their thinking or anything else. The hon. Gentleman's disgraceful question sums up their attitude all too well.

Education SSA (Dorset)

Mr. David Atkinson: To ask the Secretary of State for Education by how much Dorset's education standard spending assessment has increased in 1994–95 over the previous year in percentage terms.

Mr. Forth: Allowing for local authority changes of function, Dorset's education standard spending assessment is 4.2 per cent. higher in 1994–95 than it was last year. That is a higher than average increase across the counties.

Mr. Atkinson: Is my hon. Friend aware that the 4.2 per cent., which follows the 27 per cent. increase for the previous three years and which is well ahead of the rate of inflation, will come as some surprise to primary school teachers in my constituency and to those in the constituency of my hon. Friend the Member for Bournemouth, West (Mr. Butterfill), who were led to believe by Dorset local education authority that the fact that they have to face classes of up to 35 is due to a lack of Government funding? Will the Minister join us in welcoming the recommendation of the Local Government


Commission that Bournemouth should once again be responsible for its own schools? Will he assure us that any future Bournemouth education standard spending assessment will better reflect the needs and costs of an urban area rather than those of the west country, which is currently the case?

Mr. Forth: I am sure that, guided by my hon. Friends who so ably represent Bournemouth, the people of Bournemouth will make known to the commission their support for the recommendation. That is the best thing that they can do at this stage, following what my hon. Friend said. I agree that it is disgraceful that a large number of local education authorities pretend that, somehow, cuts in the money given to them by central Government are responsible for their mismanagement of local education. I join my hon. Friend in alerting people to the fact that under many of the new administrations that people so innocently elected a year ago something is rotten in the state of education.

Mr. Don Foster: In view of that answer, can the Minister explain why the Under-Secretary of State, the hon. Member for Hornchurch (Mr. Squire), told a delegation from Dorset on 9 March that there were insufficient funds available to meet the educational needs of the children of Dorset?

Mr. Forth: I shall have to discuss that matter with my hon. Friend to find out whether what the hon. Gentleman says is true. Knowing my hon. Friend as well as I think I do, and even allowing for his age increase since that meeting, I doubt whether what the hon. Gentleman says is the case.
Every local education authority in the country is funded on exactly the same basis, derived from the same formula, in an even-handed way. One point on which I do agree with the hon. Gentleman is that there is an enormous variation in the efficiency and effectiveness with which local education authorities deploy the funds given to them.

Nursery Schools (Rotherham)

Mr. MacShane: To ask the Secretary of State for Education what percentage of three to five-year-olds in Rotherham attend state-funded nursery schools.

The Parliamentary Under-Secretary of State for Further and Higher Education (Mr. Tim Boswell): In January 1993, 44 per cent. of children under five were being taught in maintained nursery schools and classes in Rotherham local education authority, of whom 6 per cent. were in nursery schools.

Mr. MacShane: Will the Under-Secretary of State convey to the Secretary of State our objection to the unnecessary and offensive references to the children of hon. Members? Children of hon. Members, from both sides of the House, should not be used as political footballs.
On the question of nursery education, will the hon. Gentleman invite Conservative councils to achieve the same target as that achieved in Rotherham for three to five-year-olds?

Mr. Boswell: The hon. Gentleman has asked us not to pursue personal references, but the judgment of parents, including hon. Members, is the most eloquent possible

testimony to the worth of the Government's education policies. Some 90 per cent. of children aged three and four enjoy some sort of pre-school nursery provision, which exemplifies the virtues of choice and diversity and the excellent provision of places according to need. We are anxious to build on that as resources allow.

Primary School Teachers

Mr. Pickthall: To ask the Secretary of State for Education if he will make a statement on the Warwick university research into pressures on primary school teachers.

Mr. Forth: I pay tribute to the conscientious commitment of most teachers to the principle and implementation of the national curriculum for the benefit of pupils, as confirmed by that research. The findings of Warwick university's report on teachers' workload have been overtaken by the Dearing review and the Government's subsequent proposals for reductions in the content of the national curriculum.

Mr. Pickthall: Does the Minister appreciate the seriousness of much of what is in the Warwick university report, which shows that large numbers of primary school teachers suffer from what it calls burn-out from increased illness, increased drinking and an average 56-hour week? As that follows years of incessant change and increased bureaucracy, do the Government accept responsibility?
Would not it be a good idea if the Minister or one of his ministerial colleagues spent a month teaching a year six class in a primary school? They would then realise the Herculean task that faces teachers in that sector.

Mr. Forth: I counsel the hon. Gentleman against what the authors of the report described as premature extrapolation—taking some of its findings and drawing unmerited conclusions from them. If the hon. Gentleman seriously thinks that unqualified teachers should be allowed into classrooms, for whatever motive, he should ask the hon. Member for City of Durham (Mr. Steinberg), who is sitting at his left hand, whether he would approve.
The report contains much that is worthy of thought and consideration and I would not want to dismiss it in any way. However, the picture that the hon. Gentleman portrays of our schools is wholly at odds with that which I and my ministerial colleagues see when we visit schools, as we do so often.

Sir Malcolm Thornton: Does my hon. Friend accept the evidence that has come before the Education Select Committee which shows that much of the work done by the Dearing review has resulted in a decrease in the workload in our schools? However, much remains to be done, especially in the area increasingly being called non-contact time. I refer my hon. Friend to the excellent Select Committee report, due to be published tomorrow, which deals with those very problems.

Mr. Forth: Lest prematurity become rampant, I—and I am sure my hon. Friend, who chaired the Select Committee so ably—would not want to reveal the contents of the Select Committee report at this stage. However, I very much look forward—as do we all—to studying it carefully, as I am sure that it will add greatly to our knowledge and inform us as to the way ahead.

Mrs. Ann Taylor: Does the Minister acknowledge that the report shows that all the Government's changes over the past few years have not succeeded in raising standards among young people; that they have increased stress and anxiety for many dedicated teachers; and that the picture is far from the rosy one that he was painting a moment ago? Will he confirm that early retirement of teachers on health grounds is now at record levels and costing taxpayers record amounts of money and that our schools are losing valuable and dedicated staff? Will he now accept that the frequent chopping and changing and the constant experimentation that have been the hallmark of the past two years have been costly to the taxpayer and, more important, have done great educational damage to our children?

Mr. Forth: I am grateful to the hon. Lady for reminding me to look closely again at the terms on which teachers are allowed to retire early, whether on health or on other grounds. Some of the schemes would bear closer examination than they have received until now. I am grateful to the hon. Lady for reminding me of the matter and, as my right hon. Friend the Secretary of State would say, I shall look at it as soon as I get back to the Department.

Grant-maintained Schools

Mr. Duncan Smith: To ask the Secretary of State for Education how many schools have gone grant maintained.

Mr. Robin Squire: Nine hundred and thirty schools educating well over 500,000 pupils are currently self-governing. A further 125 schools have already been approved for grant-maintained status or have applications in the pipeline.

Mr. Duncan Smith: Is the Minister aware that parents at Whitefield school, which is a special school in my constituency, have voted to go grant maintained as a result of recent legislation giving them the power to do so? Does he agree that, despite the opposition of Labour-controlled local authorities, we should encourage all the other special schools to do exactly the same?

Mr. Squire: My hon. Friend no doubt accepts that I cannot give him from the Dispatch Box this afternoon a firm announcement on the outcome of that positive ballot. With regard to his other comments, I can assure him that we shall endeavour to meet the tight deadlines and guidelines on that particular application as soon as possible. I entirely endorse his recommendation that all schools—special and mainstream—should be considering grant-maintained status as a way forward.

Mr. Steinberg: I thank the Secretary of State for his constant references to the National Union of Teachers: they help us to maintain our high profile. I appreciate his constant mention of the NUT. Does the Minister accept that his predecessor was totally wrong when he said that there would be an avalanche of schools opting out, and that the whole system has now become a complete failure? Why cannot he be magnanimous in defeat and accept the policy as a highly expensive failure?

Mr. Squire: The House and the country will note that the hon. Gentleman writes off one in six secondary school

children who are currently being educated in grant-maintained schools—and, of course, the number will be rising in September.

Further Education Charter

Mr. Spring: To ask the Secretary of State for Education what new rights and entitlements are being given to students and employers under the charter for further education.

Mr. Boswell: The further education charter sets out, for the first time, the information and services that students, employers and others have a right to expect from the sector. It explains what is being done to ensure high standards and what to do if things go wrong. Colleges are now preparing their own charters to reflect local circumstances.

Mr. Spring: Does my hon. Friend agree that it is vital that local colleges prepare their charters based on local needs and assessments of local conditions? Is my hon. Friend aware that that is precisely what West Suffolk college in my constituency has done, and that that college's approach is reflected in the excellent grades awarded to it by the Further Education Funding Council in its recent inspection?

Mr. Boswell: I am grateful to my hon. Friend for his remarks. The charters are extremely important. They should be firmed up locally to meet local needs, just as colleges' delivery of education should be appropriate to local needs. I join him in paying tribute to the excellent work of the college, which in a recent inspection had grades 1 or 2 for all subject areas but three—a fact which reflects very well both on the college and the quality of the systems that we are putting in place.

Mr. Dafis: Does the Minister acknowledge that competition between colleges of further education and between those colleges and sixth forms can sometimes give rise to bad feeling and duplication of courses and provision? Will he advise such institutions to have a collaborative relationship, to minimise misuse of resources and encourage co-operation of the best kind?

Mr. Boswell: I am interested in the hon. Gentleman's comments. Essentially, I see no reason why collaboration cannot co-exist with a degree of competition in particular areas. In that spirit, my right hon. Friend the Secretary of State brought forward proposals earlier this year for a framework for the assessment of new sixth-form provision, to be considered alongside the overall need for post-16 education.

School Repairs

Mr. Janner: To ask the Secretary of State for Education if he will allocate extra funds for the repair of schools.

Mr. Forth: Total central Government support for capital and repair work at schools in 1994–95 is more than £600 million. Local education authorities can and do add to that substantial sum. In 1992–93—the latest year for which figures are available—LEAs spent an additional £550 million on school repairs and maintenance and a further estimated £140 million on capital works. Subject to


the outcome of current public expenditure survey discussions, Government support is planned to rise in 1995–1996 and 1996–97.

Mr. Janner: Is the Minister aware that a great number of schools throughout the country are in a disgraceful state of disrepair, largely because local authorities do not have the money to add to central grants to put their schools in a fit state to receive our children? Will the Minister consider that matter and especially the cost of repairs caused by vandalism, which is causing chaos in Leicester schools? One school may have to close because the LEA cannot meet the cost of repairing it.

Mr. Forth: The last detailed study by the National Audit Office in 1991 described many schools as being in a better or acceptable state of decoration and repair and stated that schools were safe places in which to learn and work. I concede that many schools require repairs, which is why so much money is allocated by the Department to LEAs. They have the discretion that I mentioned in my original reply, and I expect them to be sensitive to the kind of problem that the hon. and learned Gentleman has raised with me on a number of occasions.
LEAs determine their own priorities, and even schools determine their priorities under local management of schools and budget allocations. They are often able to take their own steps. I hope that the hon. and learned Gentleman accepts that that is a better way of dealing with the issue than the Government's determining from the centre the priorities of 24,000 schools.

Mr. Forman: Will my hon. Friend consider including under the rubric of school repairs the equally important task of upgrading facilities that are much in demand? Will he consider with his officials the reasonable capital bid by Wallington county grammar school for boys for a new integrated science block, which would help that school maintain its high standard of science studies?

Mr. Forth: I should have been surprised if the question had not prompted just the sort of reasonable request that my hon. Friend made. I undertake closely to examine the case that he has raised. I am delighted that many schools that my colleagues and I visit have work in train and are doing precisely as my hon. Friend says—building new facilities and providing new equipment. I welcome that—as, I am sure, does my hon. Friend

Mr. Simpson: Does the Minister agree that, with so many pupils being educated in a substandard educational environment, and even if the Government come up with a decent capital programme, LEAs should be at liberty to borrow freely against their entire asset bases to guarantee a decent school environment for every child?

Mr. Forth: That is all very well, but the hon. Gentleman should consider the extent to which some authorities—I will not name them on this occasion—frittered away on other things money that was supposed to be spent on education. We need a lot more persuading that they can be trusted to do as the hon. Gentleman says before we go down that route.

School Performance Tables

Mr. Jenkin: To ask the Secretary of State for Education what plans he has to publish additional material in this year's school performance tables.

Mr. Patten: This year's tables will include more information than ever before under the parents charter. There will be additional information on achievements in vocational qualifications, including successes in the new vocational A-level. We shall also provide for the first time information on levels of authorised as well as unauthorised absence, and on classroom teaching time, in every secondary school.

Mr. Jenkin: Does my right hon. Friend agree that the importance of league tables is that they do not simply measure outcomes, but measure what has been added? Does he share my expectation that schools in all areas, whatever the social background, should be able to achieve excellent results?

Mr. Patten: My hon. Friend is absolutely right. In the post-war years we have been totally taken up with the inputs into the education system. We should be much more concerned with the outputs. It is the value added by education in schools that should concern us. That is why I was so pleased to see the recent evidence laid before the Education Select Committee, in which learned witness after learned witness said that what was really important was a combination of higher expectations and a greater concentration on teaching and learning. It is odd that some of the learned professors have not been doing that for the past 25 years.

Mr. Madden: Will the Secretary of State publish figures showing the schools where teaching staff have been made redundant as a result of the loss of section 11 funding? In his last few days in office, will he do everything possible to ensure that section 11 funding is available to give children of ethnic minority origin the maximum support in understanding, speaking and writing English?

Mr. Patten: I know of the hon. Gentleman's long-standing interest in matters affecting people from ethnic minority backgrounds in his constituency in Bradford, and I appreciate his attention and care for them over the years. However, I am extremely concerned that some section 11 money may be used to carry on the teaching of second languages—the languages learnt at home—when really, if we want all our children to be good, high-performing British citizens, the most important thing is that they be taught the English language.

Nursery Education

Mr. Harry Greenway: To ask the Secretary of State for Education how many children aged under five years are currently in (a) nursery education and (b) other forms of child care; what percentage of children under five years this represents; what is the cost; and what were the equivalent figures in 1986 and 1976.

Mr. Robin Squire: In January 1993, almost 340,000 under-fives were in nursery schools and classes—26 per cent. of the population. Equivalent figures were 272,500—23 per cent.—in 1986, and 158,000–11 per cent.—in 1976. Separate expenditure information on nursery schools


and classes has not been collected since 1986–87. Responsibility for day nurseries and other forms of day care lies with my right hon. Friend the Secretary of State for Health.

Mr. Greenway: May I congratulate my hon. Friend on that considerable progress in the important area of nursery education? Is he aware that in the London borough of Ealing the previous Conservative council increased the number of places in nursery schools by 400 over four years, to almost 3,000, making Ealing council's provision the fourth best among the London boroughs, yet that the Labour council refuses to implement its promise to provide more nursery education? The Labour party promised to do that if it won the local election, which, unfortunately, it did. Does not my hon. Friend think it a disgrace that Labour councillors do not know about keeping their promises? Is not it the children who suffer?

Mr. Squire: I am sure that my hon. Friend has already found many people in Ealing who look back with fond memory on their recently removed Conservative council, not least because of its tremendous performance on nursery education. My hon. Friend does the House a good service in reminding us to treat with great care promises that emanate from the Opposition, not least on nursery education.

Mr. Hardy: If the Minister congratulates Conservative councils that provide care for young children, will he condemn the many Conservative councils that do not?

Mr. Squire: Local education authorities' responsibility is to provide for the range of needs of the under-fives. As the hon. Gentleman knows, the properly elected council in Ealing determined that it should make significant provision for nursery education. It is possible that other councils elsewhere will choose different priorities—but they must make provision for the under-fives to meet the demand in their localities. That is their responsibility.

Grant-maintained Schools

Mr. Nigel Evans: To ask the Secretary of State for Education how many schools are grant maintained in the north-west.

Mr. Boswell: At present, there are 72 self-governing schools in the north-west region and a further 13 schools have been approved for grant-maintained status or have applications in the pipeline.

Mr. Evans: Will my hon. Friend send his congratulations to Salesbury primary school in my constituency which will become grant maintained in September, joining two other grant-maintained schools in my constituency, the very popular Clitheroe Royal grammar school and Archbishop Temple school? Does my hon. Friend agree that the best antidote to the scepticism of those who have not quite made up their minds about the success of grant-maintained schools, such as the hon. Member for Sedgefield (Mr. Blair), is for them to come to the north-west and the Ribble valley to see how those successful schools are operating?

Mr. Boswell: I am delighted to send my congratulations to Salesbury primary school alongside those for Clitheroe Royal grammar and Archbishop Temple school, a school

which I have visited and by which I was immensely impressed; it is a good example of the benefits of grant-maintained status.

Mr. Miller: The Minister is fond of blaming local education authorities, but, in the context of the north-west, will he acknowledge that there is no greater trend towards grant-maintained schools in Tory and Liberal-controlled Cheshire than there is around the rest of the north-west? Does not that mean that parents have made the right judgment and that the Tory party has got it wrong?

Mr. Boswell: There is a growing demand for grant-maintained schools. I have already referred to the 13 in the pipeline in the north-west and I have every confidence that that overall number will grow.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. MacShane: To ask the Prime Minister if he will list his official engagements for Tuesday 12 July.

The Prime Minister (Mr. John Major): This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

Mr. MacShane: Can the Prime Minister name one candidate for the presidency of the European Union who does not support the social charter aspects of the European Union?

The Prime Minister: Well, I do not know—no one yet knows—who all the candidates will be.

Mr. Burns: To ask the Prime Minister if he will list his official engagements for Tuesday 12 July.

The Prime Minister: I refer my hon. Friend to the answer I gave some moments ago.

Mr. Burns: Does my right hon. Friend agree that a key plank of Government policy is to widen choice and opportunity as much as possible to all? Does my right hon. Friend think that widening choice and opportunity would be enhanced by extending VAT to private health care and education and is he surprised that that suggestion is being mooted by the hon. Member for Sedgefield (Mr. Blair)?

Hon. Members: Where is he?

Madam Speaker: Order.

The Prime Minister: The whole purpose of the Government's education policy is to extend choice and opportunity as widely as possible. I cannot speak for the policies of the hon. Member for Sedgefield (Mr. Blair)—and nor, it would appear, can he this afternoon. It is certainly the case that the Labour party is opposed to the assisted places scheme, city technology colleges, A-levels—and, I had thought until a few moments ago, grant-maintained schools, which I understand a number of prominent members of the Labour party now seem to favour for their own families.

Mrs. Beckett: Does the Prime Minister accept what every national newspaper is saying this morning about the effects on ordinary British families of water privatisation—that it is a swindle, licensed theft and legalised robbery?

The Prime Minister: Would the right hon. Lady renationalise?

Mrs. Beckett: I think that the Prime Minister has forgotten why we are here. These are questions asked of the Prime Minister, not by the Prime Minister.
Does not the Prime Minister realise that what makes British people even more angry is that the only thing that is rising faster than their water bills is the pay of water bosses? How can he defend the fact that that chairman of North West Water received £47,000 a year before privatisation and now receives £338,000 for doing exactly the same job? Is not that a disgrace at a time when water bills are rocketing?

The Prime Minister: I suppose that the assumption must be that the right hon. Lady does not know whether she would renationalise or not. On the substantive part of her question, as she knows, Parliament has provided for an independent regulator whose responsibility it is and who is statutorily required to protect customers' interests while ensuring that they can finance their obligations. She may care already to acknowledge the change in the quality of bathing water and other European Community standards that have been brought about since privatisation and that were not apparent under any Government prior to privatisation.

Mrs. Beckett: I notice that the Prime Minister did not take the opportunity to condemn that pay rise. I hope that he realises that it is those double standards that are bringing his Government into disrepute. Is not it now the case that when people turn on the tap, when they turn on the light—in fact, every time they turn around—under this rip-off Government they are hit with higher taxes and higher charges, and that people are paying more to get less?

The Prime Minister: Perhaps the right hon. Lady could explain why British Telecom's prices are down 30 per cent. since privatisation, why the prices of telephones are down 60 per cent., and why the price of gas is down 21 per cent. It is absolutely clear that the right hon. Lady will protect anything that is in public ownership and attack anything that is in private ownership.
On the pay of water company directors, I have made it clear in the past that they should follow the lead that the Government have set for pay in the public sector and elsewhere, and I hope that the right hon. Lady will make it clear whether she would renationalise those privatised industries and see the prices go back up again, as they used to under nationalisation.

Mr. David Shaw: Does my right hon. Friend recall that, in 1989, 11 bandsmen died in the IRA bombing at the Royal Marines establishment in Deal? Will he recall also that that established a very strong relationship with the people of the town of Deal, who appealed for the music school to be kept in Deal? It was such that 12,500 people signed a petition, which I handed in to the House last Thursday. Will my right hon. Friend take note, therefore, of the strength of feeling that exists between the townspeople of Deal, the Royal Marines school of music and those people who work in it, and will he also recognise that unemployment in Deal is higher than unemployment in the area surrounding Rosyth?

The Prime Minister: I recall, as I am sure many hon. Members will recall, that dreadful deed of many years ago, but I cannot anticipate the substance of statements not yet made.

Mr. Ashdown: Will the Prime Minister reassure us that he has no intention of doing a U-turn on his policy to favour the lifting of the arms embargo if the peace talks in Bosnia fail? Is not that the single act best calculated to ensure that the position of United Nations troops in Bosnia becomes untenable? Surely, that cannot be what the Government wish to see. Is not it illogical to say to the warring partners in Bosnia, "If you will not make peace, then we will help you to make a bigger and more bloody war?"

The Prime Minister: The right hon. Gentleman sets out a policy that is not ours. He knows the strong opposition that we have consistently had to the unilateral raising of the arms embargo. That remains.

Competitiveness

Mr. Bates: To ask the Prime Minister what initiatives he is taking to improve the competitiveness of British business.

The Prime Minister: The Government are determined to build on the world-class industries that the United Kingdom already has. The White Paper "Competitiveness: Helping Business to Win" sets out the most comprehensive agenda ever right across Government to improve the competitiveness of British business.

Mr. Bates: I am grateful to my right hon. Friend for that answer, but does he accept that perhaps the greatest contribution to the increased competitiveness of our economy has come from the privatisation of loss-making nationalised industries such as British Steel? Does he accept that today British Steel is the world's most efficient producer of steel, and will he ensure that that hard-earned and strong reputation in the world will not be blunted by state-subsidised, inefficient European competitors?

The Prime Minister: We will certainly continue to do all that we can to bring pressure to bear on our European partners to ensure that British industry is not damaged by unfair competition.
Since British Steel moved from the public to the private sector, it has transformed itself into an efficient, integrated, profitable producer. Exports have doubled in recent years, and British Steel is now one of Britain's largest exporters.

Mr. Clelland: Does the Prime Minister recognise that the biggest danger to manufacturing industry in the northern region is the loss of previously privatised industries such as Swan Hunter? What will he do to protect that industry?

The Prime Minister: As the hon. Gentleman would have noted from the White Paper on competitiveness, the only way in which to protect any industry in this country—or, indeed, any other—is to ensure that it can compete, and is producing something that people wish to buy at the time when they wish to buy it and at a price that they can afford. That is the Government's policy; I wish that it had the whole-hearted support of the Opposition.

Engagements

Mr. David Atkinson: To ask the Prime Minister if he will list his official engagements for Tuesday 12 July.

The Prime Minister: I refer my hon. Friend to the answer I gave some moments ago.

Mr. Atkinson: Will my right hon. Friend accept the grateful thanks of my constituents and those of my hon. Friend the Member for Bournemouth, West (Mr. Butterfill) for last week's recommendation by the Local Government Commission that the borough of Bournemouth should return to unitary status after 20 years of county council control? Is not that a clear demonstration of Conservative commitment to strong local government, in complete contrast to the unwanted policies of remote regional government favoured by Labour and the Liberal Democrats?

The Prime Minister: I am sure that my hon. Friend will make his views known to the commissioners. We certainly wish to put decision making at the lowest possible level, so that it is close to the people who vote and pay local taxes; unlike other parties in the House, we do not want an extra layer of expensive regional government.

Mr. Barry Jones: To ask the Prime Minister if he will list his official engagements for Tuesday 12 July.

The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.

Mr. Jones: Is the Prime Minister aware that 2,000 Airbus workers in my constituency are desperate for his Government to place orders for the future large aircraft? Bearing in mind the magnificent achievement of the Airbus project, can he tell us when British Airways might buy aircraft of the Airbus marque? Does he agree that aerospace is now the greatest industry in Britain, and that it requires more support and encouragement from his Government?

The Prime Minister: I am grateful to the hon. Gentleman for giving me an indication of the question that he was going to ask on this specific subject.
As for the future large aircraft, my right hon. and learned Friend the Secretary of State for Defence has received details from. British Aerospace, which he is now taking into account in assessing the options for replacement or refurbishment of the present Hercules flight.
I wholly appreciate the hon. Gentleman's concern to protect jobs in his constituency. Commercial decisions must be a matter for British Airways rather than for my right hon. and learned Friend, but the hon. Gentleman will know that Airbus has competed very successfully. It has attracted customers from airlines around the world, most recently winning a very significant order from Singapore Airlines. I have no doubt that the quality of the product means that that success will continue.

Mr. Evennett: To ask the Prime Minister if he will list his official engagements for Tuesday 12 July.

The Prime Minister: I refer my hon. Friend to the answer I gave some moments ago.

Mr. Evennett: I thank my right hon. Friend. During his busy schedule, will he find time to visit my constituency of Erith and Crayford and see at first hand the improving economic situation and, in particular, the improving job situation in Bexley? Furthermore, will he reaffirm his commitment to lower taxation when the time is right—[Laughter.] Opposition Members laugh because they do not like the truth. Will my right hon. Friend reaffirm his commitment to the fact that Conservative Members believe in lower taxation? Opposition Members want to spend more and tax more.

The Prime Minister: My hon. Friend is entirely right about the improving economic circumstances, and about the need to bring unemployment down further. I am delighted that it is falling, although it clearly has a long way further to fall.
As for taxation, of course Labour Members dislike the prospect of lower taxation: they would like to get their hands on people's money and spend it. As the former hon. Member for Dagenham said before defecting back to New Zealand,
I think the Labour party ought to accept that…we"—
that is, the Labour party—
will always be likely to have a higher tax burden than our opponents.
That is undoubtedly true, and there is no instance in recent years of Labour Members' voting for a tax reduction.

Mr. Barnes: To ask the Prime Minister if he will list his official engagements for Tuesday 12 July.

The Prime Minister: I refer the hon. Gentleman to the answer I gave some moments ago.

Mr. Barnes: We have seen the plunder of the water industry and the electricity industry by chief executives and others, who often came from public services. The chairman of the Post Office is now pressing for the privatisation and plunder of his own service. What has happened to standards in public life and to the notion of public service?

The Prime Minister: The Post Office management has said that it believes that the best way to protect jobs, to continue to improve services and to compete is for the Post Office to have the freedoms of the private sector. I understand that the hon. Gentleman is concerned only with the qualities of envy which activate the Labour party, but the fact is that the private sector provides a better service than the public sector; it is more efficient than the public sector; and, over years, it is less costly than the public sector.

Privilege (Madam Speaker's Statement)

Madam Speaker: I have a statement to make arising from a number of privilege complaints that I have received from Members based on an article which appeared in The Sunday Times newspaper of 10 July. My inquiries went wider than simply accepting the account of matters as given by the newspaper itself.
It is relevant to the issue that I should remind the House of a paragraph in the first report of the Select Committee on Members' Interests of the Session 1991–92, which reads as follows:
There is a danger that some Members may make the mistake of believing that correct registration and declaration adequately discharge their public responsibilities in respect of their private interests. Such a mistake could have serious consequences both for the Member concerned and ultimately for the House. As the Speaker reminded the Committee, 'a Member must be vigilant that his actions do not tend to bring the House into disrepute' and, in particular, 'Members who hold consultancy and similar positions must ensure that they do not use their position as Members improperly'. A financial inducement to take a particular course of action in Parliament may constitute a bribe and thus be an offence against the law of Parliament".
It is because I consider that there is an urgent need to clarify the law of Parliament in that area that I am prepared to grant precedence to a motion on that complaint, and I do so without having the need to pass judgment on the particular actions of any of the several Members referred to in the newspaper article.
I now turn to the conduct of the newspaper itself. "Erskine May", at page 128, states:
the offering to a Member of either House of a bribe to influence him in his conduct as a Member, or of any fee or reward in connection with the promotion of…any…matter or thing submitted or intended to be submitted to the House…has been treated as a breach of privilege.
This, too, is an aspect of the affair which I believe merits further examination, as well as the subsidiary matter of the clandestine recording of Members' conversations within the precincts.
If, as a result of a motion based on those issues, the matter is referred by the House to the Committee of Privileges, I should like to make it clear that the Committee will have power to inquire not only into the matter of the particular complaint, but into the facts surrounding and reasonably connected with it, and into the principles of the law and custom of privilege which are concerned. I hope that it will use that power for the assistance of the House in a difficult area.
The procedure now is for a motion to have precedence at the commencement of business at 3.30 tomorrow. As I said, I have received a number of complaints, including one from the hon. Member for Newcastle upon Tyne, East (Mr. Brown). He will now be able to table a motion in the proper form for tomorrow's debate.

Mr. Joseph Ashton: On a point of order, Madam Speaker. I went before the Select Committee on Privileges in 1974 as the Member of Parliament who originally raised the question of "MPs for hire". I was severely censured for contempt of the House, although I was the whistleblower and not the man who was taking the money.
One of the grievances about this procedure, which I have borne for 20 years, is that there are no Hansard records of the Privileges Committee. The Committee can

decide to meet in private—and it did. It can decide to ask the people who come before it whether they wish to write to the Committee, and then various communications channels advise the Member to write to the Committee, because, if hon. Members go before top Attorneys-General, they are likely to face severe questioning.
There is no guarantee that the report is ever brought back to the House to be debated. It certainly was not in my case, even though Reggie Maudling and the other two guys—

Madam Speaker: Order. Would the hon. Gentleman please come to his point of order?

Mr. Ashton: I am coming to my point of order. Is it possible for you, Madam Speaker, to make a ruling now, especially with regard to The Sunday Times, that the Hansard report must be printed in full and that the Committee must sit in public? If not, there will be a great deal of disagreement about the recommendations.

Madam Speaker: I think that the hon. Gentleman understands that Committees are in charge of their own proceedings. The hon. Gentleman's point is not a point of order, but it is very much a matter for debate tomorrow. I hope that he will catch my eye in tomorrow's debate. As he knows, the Committee itself must determine how it proceeds.

Mr. D. N. Campbell-Savours: On a point of order, Madam Speaker. May I draw your attention to paragraph 24 of the first report of the Select Committee on Members' Interests in 1991? It deals with occasions when an hon. Member should withdraw from Committee proceedings. In this context, I refer to the proposed Privileges Committee. The Select Committee on Members' Interests said in its report:
We feel that it is right that when a member of a committee, particularly the Chairman, has a pecuniary interest which is directly affected by a particular inquiry or when he or she considers that a personal interest may reflect upon the work of the committee or its subsequent report, the Member should stand aside from the committee proceedings relating to it. This convention is so fundamental to the proper conduct of select committee business that we recommend that it should be reinforced by an appropriate resolution of the House.
In column 945—

Madam Speaker: Order. Is this a point of order for me?

Mr. Campbell-Savours: Absolutely, Madam Speaker. It is a vital point.
In column 945 on 13 July 1992, that recommendation was enshrined as a rule of the House. It was ordered:
That this House takes note of the First Report
and in particular paragraph 24, dealing with
withdrawal from Committee proceedings."—[Official Report, 13 July 1992; Vol. 211, c. 945.]
I put it to you, Madam Speaker, that the business of this Committee is consultancy. It is examining the future of consultancy. If the Privileges Committee is to comprise the great and the eminent in our ranks—that is, Privy Councillors who, in the main, have sat on all previous Privileges Committees in the House while I have been a Member—who are Members of Parliament who have directorships and consultancies in abundance, inbuilt in the Committee will be a conflict of interest which will prevent the Committee from properly deliberating on these matters. I believe—[Interruption.]

Madam Speaker: Order.

Mr. Campbell-Savours: May I finish my point of order, Madam Speaker?

Hon. Members: No.

Madam Speaker: Order. I want to listen to what the hon. Gentleman has to say, as does the House. However, he is anticipating a Committee that has not yet been established. We have not even had the motion tabled on the Order Paper; we are not into debate. Although these are very valuable points, I hope that the hon. Gentleman will make them in the debate tomorrow. Would he come to the point that he is putting to me as a point of order?

Mr. Campbell-Savours: I will come to the point, Madam Speaker.
I wonder whether you can give the House an assurance that the conflict of interest to which I referred, in so far as the Privileges Committee will be dealing with the issue of consultancy, will not be allowed to happen in this case, or its report will be discredited? The public outside expect an objective assessment about what is in the public interest and what is good for Parliament. We need that assurance, Madam Speaker.

Madam Speaker: Of course all the rules of the House will be respected. It is for the House to decide who will be members of that Committee.

Several hon. Members: On a point of order, Madam Speaker.

Madam Speaker: Order. I want no further points of order on this matter. I have made a very considered statement on this issue, and I hope that hon. Members will consider that it is a full statement. There is nothing further I can add. The points of order that hon. Members are now raising are matters of debate. They are for the debate tomorrow; they are not points of order for me.

Several hon. Members: On a point of order, Madam Speaker.

Madam Speaker: Order. I have just made my point about my considered statement. I cannot add further to it now. I ask those hon. Members who still persist in seeking to raise their points of order to reflect on the important statement that I have just made. They should not pursue those points of order now, but should seek to make them in the debate tomorrow.

Mr. David Jamieson: On a point of order, Madam Speaker. During Education Question Time, I raised the matter of an OFSTED report on Finborough school in Suffolk. The Secretary of State claimed to have no knowledge of it, but earlier this year I wrote to him about it. On 17 February, the Under-Secretary of State for Schools replied to me; he named the school and noted my concerns. Can the Secretary of State be brought back to the House to correct his misleading statement?

Madam Speaker: Not while I am in the Chair, but I believe that the hon. Member may well find other parliamentary opportunities to make his point.

Mr. Derek Enright: On a point of order, Madam Speaker. I am grateful to be called. During Education Question Time, the Secretary of State accused my hon. Friend the Member for Peckham (Ms Harman) of sending her children to a private school, but grant-maintained schools are state schools. What is more, that child is going to the school that his father attended—the local state school. Is it not scandalous that that sort of—

Madam Speaker: Order. It is totally outrageous that Members' children, on whichever side of the House their parents may sit, should be used in politics across the Floor of the House.

Sir John Gorst: On a point of order, Madam Speaker.

Madam Speaker: It does not relate to my statement, presumably, because I have made myself quite clear about it.

Sir John Gorst: The point of order that I wish to put to you, Madam Speaker, is about the question of sub judice with regard to the matter on which you made your statement. The suggestion has been made that a Select Committee which is considering the conduct of the press might examine this issue. Where the matter now stands, are the press precluded from any discussion on the basis that it is sub judice? That is the sole point I want to make.

Madam Speaker: That is a hypothetical question. If the hon. Gentleman would care to examine my statement in detail, he will see that it covers his points.

Mr. Bill Michie: On a point of order, Madam Speaker. I need some clarification of your statement, as a member of the hard-working Select Committee on Members' Interests. Do you think that that Committee has any interest in this case? As my hon. Friend the Member for Workington (Mr. Campbell-Savours) has said, given that the Committee has dealt with lobbying before, I hope that it will not be ignored on this occasion.

Madam Speaker: I think that that question might be put in tomorrow's debate. It is not a point of order for me today.

BILL PRESENTED

TRADE BOYCOTTS

Mr. Spencer Batiste, supported by Sir Rhodes Boyson, Mr. David Sumberg, Mr. John Marshall, Mr. Edward Garnier, Mr. Andrew Rowe, Mr. Alan Duncan, Mr. Greville Janner, Mrs. Gwyneth Dunwoody, Mr. David Alton and Mr. Mike Gapes, presented a Bill to prohibit companies from giving information for the purposes of a trade boycott which has not been approved by United Nations or European Union agreement; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 15 July, and to be printed. [Bill 147.]

Unfitness to Drive on Medical Grounds

Mr. George Howarth: I beg to move,
That leave be given to bring in a Bill to require medical practitioners to inform the Driver and Vehicle Licensing Agency in cases where they consider that their patients are unfit to drive on medical grounds.
The Bill's purpose is direct and simple. It would place a statutory obligation on medical practitioners, whether hospital based or in general practice, to report to the Driver and Vehicle Licensing Agency any cases in which they consider a patient to be medically unfit to drive.
I took up this case because one of my young constituents, Paul Scarisbrick, was killed in an incident on the M62 in circumstances which, had the Bill been in force, would not have occurred. To put it bluntly, if the doctors involved in treating the man responsible for causing the incident had reported his condition to the DVLA, he would almost certainly not have been allowed to continue driving, and Paul Scarisbrick would still be alive today.
Let me explain the circumstances. Two years earlier, the elderly gentleman involved in the incident, whom I will not name here, had been advised by a consultant psychiatrist not to continue driving, as he was suffering from the progressive disorder commonly known as Alzheimer's disease. However, as there was no statutory requirement to take the matter further, neither the consultant nor the GP who was also aware of the situation saw fit to communicate that information to any third party. The man accordingly ignored the medical advice, and the result was that which I have already described.
Why did not the doctors involved take the matter further? They claim that the requirement for confidentiality between a doctor and a patient prevents them from passing on such information. Interestingly, in a letter to Mr. and Mrs. Scarisbrick's solicitor, the Liverpool district coroner, Mr. S.R. Barter MBE, said:
I am in no doubt in my own mind that the existing law should be changed by statute. Once a doctor has made a clinical judgement, following full investigation, that a patient is suffering from a disease which makes him a danger to himself and the public if he continues to drive, then he should be under a statutory obligation to inform the DVLA of his opinion.
Coming from such an experienced and distinguished source, that is proof positive of the need for a change in the law along the lines that I am proposing.
I also have a letter from the director general of the Association of British Insurers, Mr. Mark Boléat, in which he says unequivocally:
ABI agrees with the purpose of your Bill to require medical practitioners to report to the DVLA a case where they consider a

patient unfit to drive, either for physical or mental health reasons.
Once again, that shows support from an important body.
The medical profession, through its professional body, the British Medical Association, is opposed to the Bill. It is jealous, perhaps understandably, of the doctor-patient relationship with regard to confidentiality. I shall make two points on that: first, to some extent, doctors already breach that particular requirement with, for example, the reporting of notifiable infectious diseases; and, secondly, such confidences should, in my opinion and that of many others, be subjected to a simple but overriding test—that the wider public interest should be taken into account.
A motor vehicle in the wrong hands is a potentially lethal weapon. It is much more lethal than a gun, for example, yet the rules governing the licensing of guns are rightly much more stringent, and require proper medical certification. Although I realise that I am not entirely comparing like with like, I feel that it is nevertheless a useful analogy to compare not a gun with a car but a potential gun user with a potential car user.
Finally, some people have objected to the Bill on the ground that it is the thin end of the wedge—a bridgehead towards the compulsory re-testing of elderly people. It is not. Different people respond in different ways to the aging process. I know many people well into their 70s and beyond who are fully capable of living a full life, including driving a car. As a forty-something myself, however, I sometimes feel that I have already started to disintegrate, so there is no clear comparison between people at different ages.
Far from being the thin end of the wedge, the Bill could halt the movement towards compulsory re-testing in its tracks, as it would deal with many of the problems by medical means, rather than by the remorseless march of the calender. I am convinced that public interest and public safety now require that we legislate to ensure as far as is reasonably possible that those whom we license to drive are medically fit to do so. It is a small measure, which could have a giant effect.

Question put and agreed to.

Bill ordered to be brought in by Mr. George Howarth, Mr. Edward O'Hara, Ms Liz Lynne, Mr. Rupert Allason, Mr. Don Dixon, Mr. Stephen Day, Mr. Peter Kilfoyle and Mr. Joe Benton.

UNFITNESS TO DRIVE ON MEDICAL GROUNDS

Mr. George Howarth accordingly presented a Bill to require medical practitioners to inform the Driver and Vehicle Licensing Agency in cases where they consider that their patients are unfit to drive on medical grounds: And the same was read the First time; and ordered to be read a Second time upon Friday 21 October, and to be printed. [Bill 148.]

Opposition Day

[18m ALLOTTED DAY]

Post Office

Madam Speaker: I have selected the amendment in the name of the Prime Minister.

Mr. Robin Cook: I beg to move,
That this House rejects the options in the Government's Green Paper 'The Future of Postal Services' for whole privatisation or part privatisation of Royal Mail and Parcelforce; records its concern that in order to achieve these options Her Majesty's Government proposes to break up the Post Office, putting at risk the close co-operation and mutual support of Royal Mail, Parcelforce and Post Office Counters; recognises the vital role of post office branches within their local communities and is concerned that the survival of branches in small communities with low turnover will be threatened by the break-up of the Post Office; believes that the best way to safeguard the continued provision of universal access and uniform affordable pricing by Royal Mail is to keep it in public ownership as a public service; congratulates the Post Office on its efficiency while a public corporation in providing the most reliable mail service in Europe at one of the cheapest prices without calling on any public subsidy; is of the view that the future of the Post Office and of its service to its customers can best be secured by providing it with commercial freedom as a single corporation within public ownership; and calls upon the Government to adopt that option.
The Opposition thought it would be desirable that the House should have an opportunity to debate the Government's Green Paper on the Post Office before the Government produce their response to the consultation on that paper. Had the Opposition not initiated this debate, the House would not have had an opportunity to debate the Green Paper before the President made up his mind on it.
As it is, we are holding a debate without the President. He is missing, just as he missed the last DTI questions—when I was informed, with remarkable appropriateness, that he was attending an invisible seminar. Today I am informed that he is in Cape Town, so instead we have with us the Minister of State.
The Government's reluctance to debate these proposals brings me to my first question for the Minister of State. As the Green Paper was not thought of sufficient constitutional importance to justify a statement to the House when it was published, and as the views of the House do not merit a debate in Government time, may we at least have an assurance that the outcome of the Green Paper will be first announced to Parliament?
I ask because I notice that the consultation period ends on 30 September. In view of the timing, may we have an assurance that the House will be the first to hear of the result, and that we will not first learn about it at the Tory party conference in October—not that we would want, or be allowed, to get in there, and I am sure that no Conservative Member with doubts will be called to air them there?
I repeat: can we have an assurance that the fate of the Post Office will first be announced in this Chamber and not in Bournemouth? I notice that the Minister is not leaping to his feet to provide us with that assurance. I appreciate that he does not have much discretion in the matter, but

perhaps, before he comes to reply, he will set the telex wires between here and Cape Town humming so that, when he rises, he will be able to give us the assurance.
While the Minister is thinking about that, may I try another question on him? I notice that the Government amendment
welcomes the opportunity of consultation on the range of options
in the Green Paper. I must therefore ask the Minister the question that the Under-Secretary appeared to have so much difficulty with a fortnight ago. How real will the consultation be? Are the Government prepared to listen to the views expressed during it?

Mrs. Gwyneth Dunwoody: No.

Mr. Cook: My hon. Friend supplies us with a candid answer, of a kind with which we may not be favoured when the Minister replies; but she voices my own suspicions.
If the consultation shows that the great majority of the British public do not want their Post Office privatised, will the Government accept that verdict?

Mrs. Dunwoody: Give way to the Minister.

Mr. Cook: I thought for a moment that my hon. Friend was again going to anticipate the answer. If so, I suspect that she would again have been correct.
The Minister owes it to the House to answer the question, and he owes it to the public to listen to what they want done with their Post Office. I say that because the Government have no mandate to privatise it. There was not a word about privatisation of the Post Office in their manifesto. It included a passage about the Post Office, but it gave no hint of privatisation. One can try sprinkling water on it, but the wording still does not appear. I have found no word of privatisation in any election statement of the Government in the most recent general election campaign.
The only reference to the privatisation of the Post Office that I have been able to find in any general election campaign was the ruling out of privatisation of the Post Office by the noble Lady Baroness Thatcher, in the 1997 general election, the week before polling day. She said:
I have indicated that the Royal Mail would not be privatised. People feel very strongly about it and so do I.
The Royal Mail, in her words,
would remain inviolate.
I cheerfully concede to the Minister that that was 1987. It was an assurance that apparently joined the list of invisibles in 1992, but no one in 1992 told us that the Post Office was now ready to be privatised or violated.
I will happily give way to any Tory MP who can produce his election address from 1992 in which he told his electorate that he thought that privatisation of the Post Office would be a terrific idea. I shall not be surprised if there are none of them. It is very wise of them, too, because the most recent opinion poll, in June, showed that 71 per cent. of the public opposed privatisation. The numbers of people opposed to privatisation have actually increased since the word got out that the Government were thinking of privatising the Post Office.

Mr. Peter Ainsworth: Will the hon. Gentleman give way?

Mr. Cook: Yes, and I shall look forward to reading the hon. Gentleman's election address in the Library tomorrow.

Mr. Ainsworth: The hon. Gentleman may recall that the Conservative manifesto in 1992 included a commitment to maintain an affordable and uniform pricing structure, a commitment to a national delivery service and a commitment to maintain a large network of post offices. Did the Labour party's manifesto contain those commitments or not?

Mr. Cook: Of course, those issues become matters of question only when the Government proceed to privatise the Post Office. There is no suggestion in our minds that we would seek to privatise the Post Office or put at risk the uniform postage, the chain of local branches or the right of any customer of the Post Office to post a letter from any address in Britain to any other address in Britain at the same low price.
Those things are put at risk only because the Government are now seeking to privatise the Post Office. That is why they have to give the assurances—why give an assurance when those things are not at risk?

Several hon. Members: rose—

Mr. Cook: I give way to seniority.

Mr. Ian Taylor: The burden weighs heavily on me, but will the hon. Gentleman consider that the Select Committee and all the people involved in the Post Office have recognised that time has passed? It is not a question of what we promised years ago. The fact is that—

Mr. Cook: indicated dissent.

Mr. Taylor: No. The fact is that there is a commercial threat to the viability of the service if the status quo is preserved. What is the proposal of the hon. Gentleman to ensure that we have a uniform national Post Office that is excellent in its delivery of service, and which gets access to capital—which it will not if it stays entirely in the public sector?

Mr. Cook: No one is defending the status quo; nor was the Select Committee. The hon. Gentleman is absolutely right in that: no one wants the status quo. Everyone wants to find a formula that would provide a stable consensus solution for the Post Office. As the hon. Gentleman asked, we produced 13 pages in our plans for a modern Post Office, in which we went for the option of commercial freedom in the public sector. Later, I shall spell out exactly what that means and how it can be delivered, and how even the current Government believe, in another context, that that can be delivered.

Mr. Anthony Coombs: rose—

Mr. Cook: No; I must carry on.
I invite the hon. Gentleman to consider this. Although I referred earlier to the opinion polls which showed that 71 per cent. of the general public opposed privatisation, I must warn the hon. Gentleman and his colleagues that 56 per cent. even of those people who last month owned up to voting Tory opposed privatisation of the Post Office. The people who voted Tory last month in the European elections are the bottom bedrock of the Tory vote. Not even a majority of the last 27 per cent. who turned out to vote Tory would vote for privatisation of the Post Office.

Mr. Michael Bates: Will the hon. Gentleman give way on that?

Mr. Cook: I shall give way in a second.
The reason why those people will not buy privatisation of the Post Office is straightforward: they have more common sense than the dogmatists and ideologues who now rule over them.

Mr. Bates: During that poll, were people asked whether they would be in favour of renationalising British Telecom? Is that still Opposition policy?

Mr. Cook: That has not been the policy of the Labour party since 1987, and there is no great secret about that. If the hon. Gentleman would read our manifesto with the same care that we read the Conservative manifesto, he would know that.
I should like to return to the question why the public have more sense than to swallow the proposal in the Green Paper. It is because they have more sense than to believe that the Post Office would work better if it was broken up, which is what the Green Paper proposes.

Mr. Anthony Coombs: rose—

Mr. Cook: Perhaps the hon. Gentleman will allow me to make my speech rather than carry on a dialogue. I am sure that I can find an opportunity later to let him intervene.
To privatise the Post Office, the Government first have to carve it up. Their only reason for proposing to separate Royal Mail from Post Office Counters and put them under separate ownership is so that they can privatise the Royal Mail, which is the profitable part. If privatisation was not on the agenda, no one in his right mind would propose to divide the Post Office and place the parts under separate ownership.
As the Minister knows, the Government held a two-year review, during which they invited views on the future of the Post Office. Not one of the published submissions suggested that it would be a good idea to break it into two separately owned companies.

Mr. Geoffrey Clifton-Brown: Will the hon. Gentleman give way?

Mr. Cook: Perhaps I may be allowed to finish this point. After that, I owe it to the hon. Member for Wyre Forest (Mr. Coombs) to give way.
We are repeatedly told that it is important to privatise the Post Office and to move it with the times, so that it can meet the challenge of the international market and beat off the Dutch raiders. Not one post office in the world has split its counter service from its delivery service, and the Dutch post office, which is held up to us as the threat to our postal services, has not only kept them integrated but said last month that separating counters from delivery would hamper their management.

Mr. Anthony Coombs: The vast majority of people would agree that the dogmatism and lack of common sense are entirely on the hon. Gentleman's part. Is he not peddling the sort of scare stories that we heard in 1983 when British Telecom was being privatised? But since then the cost of telephone calls has fallen by 30 per cent., there is more investment and the privatised BT is providing a better service for the customer than ever before.

Mr. Cook: I am astonished that, in the week in which the National Consumer Council produced a blistering report on how water charges have increased by three quarters since privatisation, hon. Members have the nerve to claim that privatisation has been the source of lower


prices. The hon. Gentleman should try telling that to the consumers of South West Water, who have seen prices double.
If the hon. Gentleman wants to take his stand on prices, let us argue prices. During the period since British Telecom was privatised, postage prices have gone up by less than the rate of inflation. BT prices overall have dropped by over 12 per cent. compared with inflation, and the price of the postage stamp compared with inflation has gone down by 2 per cent. The percentages would have precisely matched those of BT if the Treasury had not perpetually insisted on increasing payments to the Treasury. That forced the last increase in the price of postage stamps.

Mr. Malcolm Bruce: The hon. Gentleman spoke about the Dutch example. Does he agree that the competition about which the Government complain from the Dutch post office comes from an organisation that has exactly the degree of commercial freedom that the Government say is unacceptable here? It has enabled the Dutch to compete with our Post Office. Why cannot we have the same kind of operation here?

Mr. Cook: The hon. Gentleman anticipates a matter to which I shall turn. The exact model that we are invited to be threatened by, and because of which the Post Office should be privatised, is a model of commercial freedom in the commercial sector.
I was speaking about the division that is proposed in the Green Paper between the Royal Mail and Post Office Counters. That division will leave them no longer accountable to one board and under one owner. Accountability to one board has been important in the history of those two distinct businesses, because it makes sure that they pull together. The danger under separate owners who are no longer accountable to the same board is that they would pull against each other.
I shall give an example. The Royal Mail has now established callers' offices at more than 3,000 Royal Mail sorting offices to provide a limited service direct to business clients. The service is kept limited because, while there is common ownership with Post Office Counters, the Post Office board rightly recognises that that service would provide direct competition to Post Office Counters.
Once the Royal Mail is a separate company with private owners, there is nothing to hold it back from marketing those callers' offices, providing the full range of Royal Mail services. It will be under pressure from its private owners to do so, because the one advantage of breaking Royal Mail away from Post Office Counters is that it could open its own outlets and bypass post office branches.
Those callers' offices are all in delivery offices. By definition, they all have large car parking spaces. It would be easy to market them to businesses as the Royal Mail equivalent of the out-of-town Sainsburys. That would do to high street post offices what Sainsburys superstores have done to village shopping.
That brings me to the confidence trick at the heart of the Green Paper. It contains many assurances, and I am willing to accept one of them in full. I unreservedly accept the assurance on page 22 that children will still be free to write to Santa Claus after privatisation. It is good to know that the Government retain a human and delightful touch. It is also good to know that Santa Claus remains inviolate, at least until the next election.
However, we really have to believe in Santa Claus to believe the financial arithmetic of the other assurances. The big con trick practised in the Green Paper is that, by keeping Post Office Counters in the public sector, we will keep open the network of post office branches.
They will stay open only if the Royal Mail keeps up its payments. Currently, it pays £250 million a year for the handling of its services by Post Office Counters. That payment is related to the volume of its business so handled. Suppose the Royal Mail seizes its freedom to handle more of its own business in the way that I have described—how much will it be willing to pay Post Office Counters then? If its volume goes down, how much will its payment go down?
There is not much of a margin in the books for a reduction. Post Office Counters made a profit of only £25 million last year. It would take only a 10 per cent. drop in its business from Royal Mail for it to end up making a loss. What would happen then? It would have to make cuts. Where would those cuts fall? We can all predict that. The point that should worry Tory Back Benchers is the fact that it is the small village sub-post offices that get the vast cross-subsidy from the Crown post office.

Mr. Gyles Brandreth: Will the hon. Gentleman give way?

Mr. Cook: As the hon. Gentleman is no doubt worried about his village post office, I shall give way to him.

Mr. Brandreth: Of course I am concerned about the future of my village post offices.
Is not the hon. Gentleman indulging in exactly the same scaremongering tactics that the Opposition indulged in a decade ago, when they told us that a privatised British Telecom would result in vastly increased charges and the ending of rural services and rural telephone provision? In fact, the number of telephones in the rural communities that work has increased. The hon. Gentleman is simply repeating scaremongering tactics. Why should we believe him now, when what his colleagues were saying 10 years ago has been shown to be untrue?

Mr. Cook: The hon. Gentleman should be quiet and listen, because he obviously needs to do so. If he and his hon. Friends have not grasped one fact, the future of rural post offices is in deep trouble.
That fact is that the difference between telecommunications and the postal services is that, with new technology, it is now a matter of indifference how far a telephone call is going, but with the postal service the cost of delivering a letter is directly proportionate to the distance that it travels. That is why privatisation of the Royal Mail raises the problem of protecting rural post offices and remote deliveries.

Mr. Clifton-Brown: Will the hon. Gentleman give way?

Mr. Cook: I want to continue with the argument. If Conservative Members are really interested in village post offices, they had better listen to it.
If the payment to Post Office Counters goes down, and if the Crown post office is unable to maintain the cross-subsidy, how long will it be before we begin to see a retreat from the post office network?
How many post office branches would close if the cross-subsidy between Crown and village post offices were


cut? I accept that rural areas which the hon. Member for City of Chester (Mr. Brandreth) claims to represent are increasingly represented by Labour MEPs in Strasbourg, but they are still represented by Tory Members of Parliament, who may well go the way of their local Tory MEPs and disappear if privatisation results in the closure of their village shops.
Hon. Members should not think that the regulator will help if that problem arises. In the Green Paper, the regulator is the regulator of the Royal Mail, not Post Office Counters. In the Green Paper, the role of the regulator has been carefully structured so that, on the most contentious issue—the closure of a rural post office branch—the regulator will have no role.
In any case, the real job of the regulator—as with so many of the regulators appointed by the Government when they privatise utilities—has nothing do with protecting services and everything to do with promoting the interests of competitors and reducing the market share of the utility.

Lady Olga Maitland: We have been hearing constant jeering about the Government's plans for the Royal Mail, but will the hon. Gentleman not tell us what his policies would be for the Royal Mail? Would he invest in it? If so, is this a spending pledge, and would he sustain it?

Mr. Cook: I do not know whether the hon. Lady was here when I answered precisely that question. I gather that she was not here, so I should stress that it is a waste of the House's time if hon. Members feel free to intervene without having listened to a speech.
The hon. Lady asked about investment. The Post Office would have no problem meeting its investment plans if the Treasury were not constantly increasing the amount of money that the Post Office has to hand over; it has trebled over the past three years.
There is a paradox before the House. We are invited by the Green Paper to believe that, in the public sector, the Post Office faces slow decline, but the public expenditure White Papers say that the Treasury expects rising profitability in the public sector. That is why the Post Office cannot invest.
The hon. Lady asked about the spending commitment. If the Treasury did not demand so much in profits from the Post Office, there would be no need for any spending commitment. [Interruption.] No, there would not. That money would provide the investment.

Mr. Clifton-Brown: Will the hon. Gentleman give way?

Mr. Cook: No. I said on the last occasion that I would not give way again.
The Green Paper opens up the Post Office to competition; it opens up every part of the operation of the Royal Mail except the last bit, where the letters are pushed through the letter boxes. It is understandable that the Green Paper does not propose to open that up to competition. Door-to-door delivery is the labour-intensive part of the operation. It is high in costs, and it is impossible to find anybody who wants to take it over, but it is the only part of the monopoly that will be left.
Under the Green Paper, Royal Mail will be forced to accept competitors collecting bulk mail from big clients,

sorting it out in their own mail rooms, transporting it to the city of destination and then dumping it at the Royal Mail delivery office for the postman to cart round the streets.
It will not save the Royal Mail much in costs. Even if the competition cuts out all the large clients who are easy to handle at a profit, the Royal Mail will still be obliged to collect from every collection box, run vans between every town and maintain all 80 mechanised sorting offices round Britain. The fixed costs of its network will not decrease in step with the volume that is passing through it, but the revenue will fall with that volume.
The problem for the public is that, as the competitors skim away the profitable parts of its operation, Royal Mail will not have the same profits to cross-subsidise the domestic customer who wants to post a single letter—particularly the expensive domestic customer who wants to send it a long way.
I refer to it as a problem. I am not sure that everyone sees it as a problem. In the early 1980s, one Tory MP advocated that we should have a Royal Mail in which people paid for the distance they wanted their letters to go. As he rather cheerfully argued,
There does not seem to be a case for massive subsidisation of all those living in the outer Hebrides who also choose to have all their friends in London. The introduction of distance pricing for the mail service could be crude but still effective.
Just how crude can be seen from the estimated cost of sending a letter from the Hebrides to London, which would produce a distance pricing of £10. Certainly crude, and only effective in relieving the Post Office of any need to provide the service.

Dr. Keith Hampson: Scaremongering.

Mr. Cook: The hon. Gentleman accuses me of scaremongering, but the Member of Parliament that I quoted was no ordinary Tory. He is now a Cabinet Minister—the Secretary of State for Wales. The hon. Gentleman can shake his head as much as he likes, but that was said by the Secretary of State for Wales. My Welsh colleagues may also shake their heads in disbelief, but he is unfortunately still the Secretary of State for Wales. He may not have stayed overnight in Wales, but every week he sits in the Cabinet that will decide the response to the Green Paper and that invites us to believe their assurances that a uniform, affordable tariff will remain.

Mr. Stuart Randall: I am worried by my hon. Friend's remarks about possible charging. What would happen at Christmas? Would the poor and pensioners no longer be able to send Christmas cards?

Mr. Cook: I will answer my hon. Friend by considering the one example in the world of a country that has opened up its postal services to outside competition in the way that the Green Paper envisages for the Royal Mail after privatisation. Since New Zealand liberalised its postal services, the average postal charge has increased 50 per cent. to compensate for the loss of profitable business. Tory Members might like to note that rural residents in New Zealand pay an annual fee of 80 dollars if they want their mail delivered to their door.
One hundred and fifty years of public ownership has given Britain one of the best postal services in the world. It has more deliveries than, for example, the Dutch postal service can manage. There is no second delivery or


Saturday delivery in Holland. London enjoys 11 deliveries a week, but Amsterdam has only five. Anyone who reads the Green Paper's tepid paragraph on second delivery will know that there is no assurance that delivery will join Santa Claus in surviving privatisation.
The UK postal service is also cheaper. Since the mid-1980s, its charges have fallen against inflation, and they are now one fifth lower than those of the Dutch postal service. The Post Office has also made bigger productivity gains. Since the mid-1980s, it has achieved higher productivity while in public ownership than gas or electricity under privatisation.
I grant that the Post Office is not top of the table. If one considers all the energy and utility industries, whether public or private, top of the table for productivity is British Coal—not that it receives any reward from the Government. The Post Office comes in higher than many industries that the Government have already privatised.

Mrs. Dunwoody: What is happening already in rural areas is bad enough. Not only are small country towns losing Crown post offices, but many rural post offices are under such pressure that they too will soon lose their trade.

Mr. Cook: My hon. Friend emphasises that many Members of Parliament on this side of the House represent rural areas, and understand perfectly well the anxieties felt by people living in them. They know precisely why strong public opinion is registered against privatisation.
Ours is also the only postal organisation in the world that makes a profit on its mail services.

Mr. Clifton-Brown: I have listened carefully to the hon. Gentleman's arguments against privatisation, and I am particularly concerned, as is the hon. Gentleman, about rural offices. Does he realise that 19,000 out of 20,000 offices are currently in private ownership? As he is so keen to reverse privatisation of the Post Office, will he pledge here and now that his Government will find the funds to renationalise the Post Office if we privatise it?

Mr. Cook: I have already answered that question. If the Government are daft enough to proceed with privatising the Royal Mail, we will look at ways of restoring it to where we believe it belongs—in public control, where the bulk of its customers want it kept.
As for the 19,000 sub-post offices in private ownership, it is perfectly correct that they have private sub-postmasters. Those people are working to a contract with Post Office Counters, and the money they receive under the contract depends critically upon the money that Post Office Counters receives from Royal Mail.
If the hon. Gentleman is really concerned about the future of his village post office, he should ask himself whether it makes sense to do as the Government propose and to break Post Office Counters, a company making a £25 million profit, away from Royal Mail, a company making a £280 million profit. If I, as a constituency Member for that village, were interested in the hon. Gentleman's village post office, I should seriously doubt the wisdom of that separation of Post Office Counters from its major source of revenue.
As I was saying, we have the only Post Office in the world that makes a profit. It gets not one penny in subsidy. On the contrary, it subsidises the Treasury with the profits that it hands over—and those demands have trebled over the past three years. This year, the Post Office will pay the

Treasury £230 million—almost as much as Post Office Counters receives from Royal Mail for handling charges and for keeping open the entire post office network throughout Britain.
Of course, the reason why that sum is demanded from the Post Office has nothing to do with an estimate of its profitability and everything to do with the Treasury's calculation of what it desperately needs. That is the real reason why the "For Sale" sign is going up outside the Post Office: the Treasury needs the money. After 150 years of public stewardship of the Royal Mail, the threat is that it will be brought to an end to pay for 15 years of economic incompetence by the Government.
The Post Office need not be privatised. There is an alternative. Let me answer the hon. Members who have asked about it. There is an alternative that would provide the commercial freedom that the Post Office needs to meet the new competition while keeping it together and keeping it in the public sector. The Post Office would have the commercial freedom to allow it to expand its commercial activities, to form joint ventures with private sector companies, to raise capital for investment from private sources, and to compete in the new global communications markets.
It is true that commercial freedom in the public sector is included as an option in the Green Paper—I hope to hear something from the Minister about that. However, I have never read any Green Paper with so little faith in one of the options that it lays before us. Indeed, even before the rest of us can express a view, the Green Paper tells us that the Government have concluded that that option will not work.
It is not entirely clear why Ministers have come to that conclusion. I was perplexed by the reasoning used by the Under-Secretary of State for Technology on the "Today" programme last week, when he said that the Post Office could not have commercial freedom in the public sector because there is
always the knowledge that so long as it remains in the public sector then it can't go bankrupt".
That seems to me a good reason for keeping it in the public sector. The idea of the freedom to go bankrupt seems an excellent argument against privatisation.
The Green Paper that the Minister was discussing says that public ownership would condemn the Post Office to "slow decline". That is an appalling admission. Ministers are effectively saying that, if they remain responsible for the Post Office, the best they can offer it is slow decline. If that is true, it is an argument not for taking the Post Office out of the public sector, but for putting that lot out of government, so that they are no longer responsible for the public sector.
The Minister is now in a difficult position, because last week his argument that there cannot be commercial freedom in the public sector was demolished from the Government Dispatch Box, when the White Paper on the BBC was introduced. That offered the BBC commercial freedom within the public sector—the freedom to expand its commercial activities, to form joint ventures, to raise capital for investment from private finance and to compete in the new global communications network. The BBC will be able to do all that, and still stay in the public sector.
Why is that possible for the BBC, yet we are told that it is not possible for the Post Office as a public corporation? When the Minister comes to speak, he cannot


pretend that that option is now not available to the Post Office, unless he intends to vote against the Government's White Paper on the BBC.
But there is another reason why the Government should embrace the option of commercial freedom within the public sector. If they are to be responsible about the future of a major public corporation, they should build that future on consensus. Every party on the Opposition Benches would support the option of commercial freedom in the public sector; that would make it a firm and stable option, which would take the Post Office into the next century. That does not need legislation. It does not even need consultation. It is an option on which we could go snap this afternoon.
But of course, I know that the Minister will not do that. I know that the Government will not do it. They will not do it, because they have been in power for so long that they have forgotten that they are there only as the trustees of public corporations, not the owners of those corporations, to sell them off whatever the rest of us think.
This Government are at the fag end of their days, marking their time until the day that they return to their community. Yet this Administration, on borrowed time, claim the right to end the public status of the Post Office, which goes back 150 years and is supported in public opinion polls by three times the number of members of the public that were prepared to support the Government.
Moreover, the Government claim the right to sell the Post Office without any mandate from any election. If they proceed on that basis, they will make a mockery of parliamentary democracy. They have three months in which to reconsider—the three months that they have given themselves for consultation on the Green Paper.
I asked at the start of my speech whether the Government would listen to the overwhelming majority of the customers in that consultation who will not want the Royal Mail privatised. It was no trick question. It is the real test of whether they will govern according to the wishes of the people or rule by imposing their own political prejudices on the nation.
We will ensure that, during the next three months, the public are given every chance to express their views on the Post Office loud and clear. [Interruption.] The public will notice that, when we refer to that, Tory Members of Parliament already laugh at the idea of listening to the views of the public. I warn them that, if they choose to laugh rather than listen to those views, we shall make their contempt for the views of the public one of the main issues of the next parliamentary year, and we will fight to keep the Post Office where it belongs—in the public sector providing a public service.

The Minister for Industry (Mr. Tim Sainsbury): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
'agrees with the Select Committee on Trade and Industry that the Post Office cannot be retained in its present form; therefore welcomes the publication of the Government's Green Paper on the future of postal services which acknowledges the need for greater commercial freedom for the Post Office and provides increased opportunities for sub-post offices; recognising the importance to communities of Post Office Counters and the Royal Mail, supports the Government's commitment to the universal service at a uniform and affordable tariff, with a nationwide

network of post offices; condemns the approach that the only possible solution is 100 per cent. public ownership; and welcomes the opportunity of consultation on the range of options.'.
Before I respond to points on the Green Paper, I remind the House that I have a declared interest as a shareholder in J. Sainsbury plc. Recently, the Post Office has transferred a number of its Crown offices to agency or franchise status. Those franchise arrangements are made with a number of stores, including those of the Co-operative movement, and I understand that five of them have been established in Sainsbury stores.
I should make it clear to the House that the choice of private sector franchisees in individual cases is wholly an operational matter for Post Office Counters. Ministers and officials of the Department of Trade and Industry are neither involved in nor informed about such decisions.

Mr. Derek Fatchett: That was the best part of the Minister's speech.

Mr. Sainsbury: I can tell the hon. Gentleman that I now come to the most important part of my speech.
We welcome the Opposition's choice of the Green Paper on the Post Office as the subject for today's debate because it gives us an opportunity to publicise the options in it and the guarantees that it repeats. It also enables us to expose once again what I could almost call the Opposition's North Korean approach, exemplified so splendidly by the hon. Member for Livingston (Mr. Cook). The motion is based on the Opposition's simple proposition which the Government totally reject: public sector good, private sector bad.
The speech of the hon. Member for Livingston exposed his failure to recognise the opportunities that technological change is bringing to the Post Office and, indeed, could bring to Post Office customers if we were to respond positively. It was fairly predictable. We know the style—a nice snappy start and some good knockabout stuff. It reminded me of an England batting performance these days. The start was followed, I am afraid, by a middle order collapse. There were some wild, ill-judged strokes—exemplified by the hon. Gentleman's usual scare stories—an absence of runs scored and an absence of content. There was a little flourish by the tail, but the end verdict has to be that it was another very unsatisfactory performance.
Most of all, the hon. Gentleman's speech was a missed opportunity to be positive and to put clause 4 out of his mind for a change, although that may be too much for the hon. Gentleman. It is no wonder that, like the England cricket team, he has such a consistent record of losing.
Hon. Members have been reminded that on 30 June we published a consultative document entitled "The Future of Postal Services". Let me stress straightaway the word "consultative". The Green Paper sets out the issues surrounding the future of postal services and discusses a number of options for the future of the Post Office. It invites comments by 30 September and all members of the public and organisations with an interest are invited to comment on the proposals. The Government will form a view in the light of all the comments received.

Mr. Michael Clapham: My hon. Friend the Member for Livingston (Mr. Cook) referred to the MORI poll. The Minister should be aware that 70 per cent. of the people who took part in the poll were against the privatisation of the Post Office


and that 57 per cent. of the people who took part were Conservative voters and were against privatisation of the Post Office. Furthermore, 70 per cent. of the people who took part came from the constituencies of Tory Members. Does not the Minister agree that the poll shows that there is enormous public pressure for keeping the Post Office public rather than privatising it? Should not he be acting on that consultation process?

Mr. Sainsbury: The hon. Gentleman has a touching faith in the accuracy of opinion polls, which he might have found disappointing in the last two elections.
As I said, the point of the Green Paper is to have an informed consultation period, which, I regret, will not be helped by the hon. Member for Livingston giving publicity again to his usual scaremongering stories.

Mrs. Dunwoody: The Post Office put out for consultation over a three-month period the proposal to close the main post office in Nantwich, which has had a post office almost since the 1700s. It received a large volume of letters, postcards and petitions, all of which opposed the closure of the post office. The Post Office, however, has carried out a decision that it took three months earlier and our post office will now be located in a store somewhere else, which is deeply resented by many people and is certainly not the result of proper consultation.

Mr. Sainsbury: The hon. Lady refers to the Crown conversion programme and, interestingly, to what is clearly a commercial decision of the Post Office. One of the many points left unresolved by the hon. Member for Livingston is the extent to which he would seek to interfere with the existing freedoms of the Post Office.
The Government are not consulting on certain aspects of the Green Paper. Those involve the Government's absolute commitment to a number of basic postal services, which we have described as the non-negotiables. The three important commitments are: a universal letter and parcel service; a uniform and affordable tariff structure; and a nationwide network of post offices.

Lady Olga Maitland: Does my right hon. Friend agree that the scaremongering stories whipped up by Labour have only served to worry and frighten elderly people all over the country? Will he confirm that the services provided by Post Office Counters will continue? In particular, how does he propose not only to maintain a uniform stamp price—regardless of where the letters are being sent—but to ensure that that price remains affordable?

Mr. Sainsbury: I shall come to the last point in a moment. I certainly agree with my hon. Friend about the scaremongering: it has a long and well-established history, which is presumably approved of at the very top—or, at any rate, what we expect to be the very top soon. I note that, in December 1988, the hon. Member for Sedgefield (Mr. Blair) said:
…the idea that we will have an influx of power stations, all competing on the grid, is nonsense."—[Official Report, 12 December 1988; Vol. 143, c. 683.]
I wonder what the hon. Gentleman thinks about that particular scare story now.

Mr. Bruce Grocott: Will the Minister give way?

Mr. Sainsbury: I think that I ought to make a little progress. I have given way three times. I may give way to the hon. Gentleman later.
The commitments of which I have just reminded the House were first made in the citizens charter, were repeated in the Conservative party manifesto and the announcement of the Post Office review, and have been reiterated many times in the House. The hon. Member for Livingston, however, has never been one to let the facts get in the way of a good story.

Mr. Grocott: Will the Minister give way?

Mr. Sainsbury: The hon. Gentleman is very persistent. All right, I will give way.

Mr. Grocott: I am grateful to the Minister. Will he answer a simple question? Should the British public give more or less credence to the "absolute assurances" that he has just given about the universal provision of the Post Office than to the "absolute assurances" that he and his colleagues gave before the last election that they would not raise taxes?

Mr. Sainsbury: The hon. Gentleman's fairly predictable question has been covered in the House so many times that I think we would do better to get on with the matter in hand. Undertakings on taxation are a familiar topic, but not one that need concern the Post Office.
Let me deal with the substance of the Green Paper. One fact about which the hon. Member for Livingston and I may agree is that the Post Office is a very successful business, providing a daily letter service throughout the nation at a uniform tariff and with ever-improving standards. It supports 20,000 post offices, providing pensions and similar public services from city centres to the remotest parts of the country. It has just announced its 18th year of subsidy-free profit. It is thus no surprise that the Post Office is highly popular with the public, bracketed with Marks and Spencer—or, perhaps, other private-sector suppliers of life's essentials such as food and clothing.
Despite that success, however, the Post Office faces new challenges. Its markets are changing, and changing fast. The hon. Member for Livingston seems not to recognise that both Post Office Counters and Royal Mail, the main constituent businesses of the Post Office, are faced with increasing competition. For example, virtually no services are now available only at post offices. Stamps are sold in all sorts of places; pensions can be paid directly into bank accounts or building societies—40 per cent. of new pensioners are choosing that option—and television licences can be, and often are, paid for by direct debit.
Royal Mail is under similar pressure. It faces increasing competition from the fax machine, electronic mail and, of course, its traditional rival, the telephone call. The real cost of telecommunications is falling fast, making those rivals ever more competitive. Royal Mail has been developing the direct mail market, but faces strong competition from other forms of advertising. Mail services are becoming more and more internationally—rather than nationally—based.
I am not suggesting that the business is about to collapse, but the fact that the volume of mail posted in pillar boxes fell last year for the first time in more than 10 years is a disturbing sign. Conservative Members believe


that diversity of choice for the consumer is to be welcomed, not feared; we neither could nor wish to resist the developments that I have mentioned.

Mr. Malcolm Bruce: What assurances can the Minister give that Sunday collections will continue after privatisation? Sunday collections were introduced only after an extensive campaign in the House. I doubt very much that they are profitable, but they are very much appreciated, especially by people in rural areas who write to their families and friends. It is not the commercial mail that the Post Office is seeking, but the public service which many of us are seeking to protect.

Mr. Sainsbury: I suspect that the hon. Gentleman knows that Sunday collections are by no means universal; they are at the discretion of the Post Office. It is a matter for its commercial judgment and it assesses them on an efficiency basis. It is interesting to note—I suspect that I am wrong—that the Liberal Democrats would, like the Labour party, seek always to interfere. That is one of the reasons why the Post Office wants freedom. Public ownership does not come without constant interference or the pressure for interference.

Mr. Peter Hain: rose—

Mr. Sainsbury: I must make some progress. I have been generous in giving way.
Common ground is shared on many of the background facts. I hope that it is also common ground to think that change is necessary to ensure that the Post Office can respond to the challenges and the opportunities that it faces. In particular, it is increasingly clear that the conventional public sector or nationalised industry approach to the management of the business is insufficiently flexible to allow the management to respond properly to the competitive pressures to which I have referred. The report earlier in the year by the all-party Trade and Industry Select Committee concluded that the various public sector constraints on the Post Office's activities were
having a detrimental impact on the Post Office's ability to act as a commercial organisation, to deliver an ever higher quality of service to its customers and to meet the challenges and opportunities of international competition.
The Government, therefore, make no apologies for having launched the Post Office review and concluding that the status quo is not an option. Indeed, the Select Committee itself, chaired by that noted privatiser the hon. Member for Sheffield, Central (Mr. Caborn), agreed that
the Post Office cannot be retained in its present form".
Let me now turn to the individual post office businesses, beginning with Post Office Counters. Counters provides the co-ordinating and managerial support services for the network of 20,000 post offices. That network has effectively been run as a separate business within the Post Office since 1986. It has important trading relationships with Royal Mail and Parcelforce, but I should stress that those trading relationships are on an arm's length basis. The most striking feature of the business is that it is based on a combination of public and private sector investment. Approximately 19,000 of just under 20,000 outlets are run

as private businesses by sub-postmasters and sub-postmistresses, whose own investment has been estimated to be in excess of £1 billion—well in excess of the public sector investment in the business.
The Government have, of course, considered whether there is a case for changing that structure. They have concluded, however, that no change is necessary. As the National Federation of Sub-Postmasters has made clear, the key issue for the future of the post office network is not its ownership, which is already predominantly private sector, but the need to generate higher turnover for the network and to offer a more efficient and automated service to its clients. The Government accept that view. We have, therefore, concluded that the co-ordinating business of Post Office Counters should remain in the public sector, but that it should be given greater freedom to take on board new clients for the network, thus enabling it to spread its costs over a wider range of activity. The Green Paper contains guidelines setting out those new arrangements, with the necessary safeguards to ensure fair competition.
In addition, the Green Paper confirms the intention to invest at least £130 million in the automation of the benefit-payment system at post offices, enabling Post Office Counters to provide a more efficient and secure service, initially for its major client, the Benefits Agency, and thereafter for other clients.
The House may wish to know that the general secretary of the National Federation of Sub-Postmasters, Colin Baker, has written in the federation's newspaper, saying that
the Green Paper should be welcomed by members of the federation… It proves that the Government has listened to our advice".
Before moving on to the subject of Royal Mail, perhaps I may deal with one little scare story that has already been raised—the hon. Member for Livingston has referred to it again today—that Post Office Counters could not possibly survive under separate ownership from the rest of the Post Office. It is baloney. There is no cross-subsidy between Royal Mail and Post Office Counters. While there are important trading links, they are based on commercial terms, negotiated on an arm's length basis. The Green Paper makes clear that the Government will continue to require Royal Mail and Parcelforce to offer the full range of public letter and parcel services at post offices.

Dr. Hampson: Is it not ironical that Opposition Members are keen to praise the private-public relationship on the counter side, where there are 19,000 or 20,000 privately owned businesses, yet they are denying the opportunity of the same participation for Royal Mail? Our proposals enable the work force to have a shareholding in the Royal Mail for the first time. That seems bold and imaginative, but Opposition Members have not mentioned it once.

Mr. Sainsbury: My hon. Friend is being rather uncharacteristically kind to the Opposition in saying that it is ironical. I just think that it is contradictory and typical. In no way is Post Office Counters a weak and feeble creature dependent on the charity of big brother Royal Mail. That would be an insult to a successful retail business and I would never insult successful retail businesses. It certainly does a disservice to 19,000 sub-postmasters.
I shall now turn to Royal Mail. The Green Paper sets out three options for the business, which are all designed to give it the commercial freedom that it is universally agreed


is necessary. First, the Green Paper discusses the option of giving the Royal Mail the freedom it needs within the public sector. It identifies a number of difficulties, however, in reconciling the scale and scope of the commercial freedoms that the company needs, with the appropriate and responsible control of public sector organisations, relating to public-sector finances and fair competition with the private sector.
Secondly, the Green Paper sets out the case for a conventional 100 per cent. privatisation of the Royal Mail backed by independent regulation. Clearly, that would deliver the Royal Mail the commercial freedoms that it needs. But the Government recognise that many people would prefer to see a closer link with the Government than full privatisation would provide. The Government have, therefore, proposed a third option—at this stage it is their preferred way forward—under which shares in Royal Mail would be sold to the public and to its employees and sub-postmasters, but under which the Government would retain a significant shareholding of 49 per cent. of the shares. Parliamentary approval would then be needed before any sale of those shares.
The Opposition have responded with their traditional, predictable knee-jerk reaction to those three options. First, they have argued that all the necessary commercial freedoms can be given in the public sector, so that there is no need to consider private-sector options. We heard that again today from the hon. Member for Livingston. Secondly, they have suggested that any sale of shares in the company would immediately lead to one of their most distasteful categories of people: rampaging capitalists, inevitably, as they see it, slashing services and destroying communities. Their reaction is entirely predictable: public sector good, private sector bad. Kim Il Sung come back, all is forgiven. Their reactions are entirely predictable, entirely irresponsible and entirely wrong.

Mr. Nicholas Winterton: I hesitated to intervene because I wanted to hear the Government's case. Would my right hon. Friend give me an assurance that if, after what I hope will be meaningful consultation, there is a substantial view in favour of option one—that the. Post Office should have commercial freedom—which can be given without too many difficulties, he would support that option? Does he accept that there are a number of Members on the Government Benches who do not wish to see the Post Office put into the private sector because we know the problems that the fragmentation of it would create? Will he give me an assurance that, if there is the widespread support from individuals, in the House and outside—

Madam Deputy Speaker (Dame Janet Fookes): Order. The hon. Gentleman is making a very long intervention. I think that he has made his point. I call the Minister.

Mr. Sainsbury: I am happy to reassure, if necessary, my hon. Friend the Member for Macclesfield (Mr. Winterton) that, of course, we shall listen extremely carefully to the response to our consultation paper. I hope that he will listen with equal care to what I am about to say about the difficulties associated with the public sector option.
I deal first with the argument that the necessary freedoms can be given in the public sector—the crux of the argument of the hon. Member for Livingston. To listen to some of the statements by the Labour party, we could

almost believe that controls on the expenditure of nationalised industries were an invention of this Government. The hon. Member for Livingston must have a short memory. He was in the House, supporting the then Labour Government in 1976, when the investment programmes—much needed investment programmes—of the nationalised industries were slashed by the Chief Secretary to the Treasury, his noble Friend Lord Barnett. It is worth remembering that the hospital building programme was cut by a third. In the Post Office itself, investment nearly halved between 1976 and 1978. As a result, Post Office investment in 1978 was, in real terms, only about a quarter of what it is today. That is why we are not disposed to take lessons from the Labour party on running public industries.
We realise that a business in the public sector has the taxpayer standing behind it. As long as the state owns a majority of the shares in Royal Mail—I say to my hon. Friend the Member for Macclesfield that it does not matter whether that stake is 51 per cent., 70 per cent. or 100 per cent.—it is in the public sector and falls within the public sector borrowing requirement. We recognise the vital importance of controlling the PSBR. We will not sacrifice our belief in the sound management of public finances on the altar of political expediency.

Mr. Robin Cook: I am sure that the Minister would not wish to describe the Government's White Paper on the BBC as political expediency. Can he now explain to the House why all the difficulties that he adumbrated in relation to the Post Office staying in the public sector and commercial freedom apparently do not apply to the BBC and why his Department cannot get the same deal out of the Treasury as the Department of National Heritage can?

Mr. Sainsbury: I suggest that the hon. Gentleman reads carefully the Green Paper on the Post Office and that he reads the document on the BBC equally carefully. Having read those documents, he will, I hope, immediately recognise that whereas the Royal Mail wants to enter joint ventures where it is the controlling shareholder and the controlling operator, the BBC is seeking not to do that, but to enter joint ventures where it is the minority partner—a very different circumstance. There is, of course, a wide range of other difficulties which are obvious to most of us.

Mr. Cook: The Minister has mentioned one difficulty. Let us, for the purposes of hypothesis, agree on the following. Let us suppose that the Post Office said that it was willing to be a minority shareholder in joint ventures. Would that remove the Minister's objection? What is his next objection?

Mr. Sainsbury: I do not want to be driven entirely into discussing the BBC. I merely say to the hon. Gentleman that the BBC's commercial freedom, as set out in the White Paper, is entirely consistent with the general rules on public sector freedoms, which we have set out in the Green Paper. The Government are encouraging the BBC to develop its commercial activities with private sector partners and finance under the private finance initiative.
The Green Paper makes it absolutely clear that the Post Office, too, could benefit from that initiative. The question is whether that would meet the commercial needs and opportunities facing the business. In the case of the BBC, as I have said, it does because it enables it to operate through the joint venture companies I have described.


What the Royal Mail needs is something different. It wants to be able to compete with other Post Offices and to put more business through its own network. It is not looking for partners who will control any joint venture with majority stakes; it is looking for full commercial freedoms. I say again to the hon. Gentleman that the two cases are entirely different.
However, I recognise that there are some freedoms that are compatible with pubic sector status. We are giving greater freedoms, for example, to Post Office Counters to take on new clients. However, the differences between the Royal Mail and Post Office Counters are considerable. Counters has a unique combination, to which my hon. Friend the Member for Leeds, North-West (Dr. Hampson) referred, of public and private sector investment.
The freedoms which the Royal Mail is seeking, however, go much further. It wishes to borrow, possibly extensively, on private capital markets. It wishes to offer new services to the private sector, based on its existing skills, but developing new skills and services. It wishes to operate in the international as well as the domestic market, striking new partnerships with the private sector, but also competing head on with it. It needs to compete to forge its own role in a rapidly changing and developing communications market against major international competition. It needs real management control over these activities.
The Government wish to see the Royal Mail go down that route. It does not follow that such a route is compatible with the public sector. The public ownership option, clearly dear to the Labour party, leaves three unanswered questions. First, how can competition with the private sector be fair? Secondly, will there be any Government interference in commercial matters? The signs from today's debate are that there would be. If there was no interference, what would be the purpose of public sector status? Thirdly and most importantly, with Treasury controls and the straitjacket of the annual expenditure round, how could the Royal Mail fund its long-term investment requirements?

Mr. Ken Purchase: More Government investment.

Mr. Sainsbury: The hon. Member for Wolverhampton, North-East (Mr. Purchase) seems to overlook—he was not here at the time—what happened between 1976 and 1978, under the then Labour Government, to investment in the Post Office; it was halved. I suggest to the House that we should think long and hard before we leave the Royal Mail subject to the restraints that go with the public sector.

Mr. Purchase: The Minister is right to say that I was not in this place then. However, I recall those events. Why does the Minister now talk about the management of this enterprise as though, at present, there is no proper management control? Yet from what we have heard, the Post Office is an immensely successful enterprise.

Mr. Sainsbury: The management are asking for commercial freedom. If we are serious about commercial freedom—I make this point to my hon. Friend the Member for Macclesfield as well, if he will kindly listen—we must realise that it is clear that only in the private sector can that freedom be found. For the Post Office to be in the private

sector, the Government must reduce their stake in Royal Mail below 50 per cent. The Government believe that doing that will provide the best prospects for the future of Royal Mail. We believe that, without commercial freedom, there is a risk of long-term decline.
The Green Paper makes it absolutely clear that the legislation authorising any sale of shares in the Royal Mail would also establish a postal regulator and regulatory system which would be expressly designed to ensure the maintenance of the key public service elements. There would be, for example, an absolute requirement on the new company to deliver mail to every household in the country, six days a week, and to maintain a uniform tariff structure—my hon. Friend the Member for Macclesfield asked about this earlier—so that a letter sent from Westminster to Victoria would cost the public the same as one sent from Cornwall to the outer Hebrides. There will also be tariff control, with the Government confident that tariffs will continue to be reduced in real terms.
The Green Paper also makes it clear there will be additional obligations on the company to continue to provide free services for the blind, to provide redirection services and to offer recorded delivery, registered post and a full international service. If the consultation exercise persuades us that we should lengthen this list, we shall do so. In all these areas, the regulator will be empowered to ensure that the Royal Mail meets all its obligations to an ever higher standard.

Mr. Nicholas Winterton: My right hon. Friend has outlined many social obligations which will be imposed on the Post Office and, no doubt, enforced through a regulator. Is not that Government interference? How does that lie with the strictly commercial criteria that the Government are outlining to the House? To my mind, the public sector, with commercial freedom, is where the Post Office should lie because of its substantial social obligation and responsibility.

Mr. Sainsbury: I make the same recommendation to my hon. Friend as I made to the hon. Member for Livingston—that he carefully reads the Green Paper and then considers the position of British Telecom. I hope that he supports its being in the private sector. The social obligations we are talking about in the Green Paper are those that are imposed on British Telecom.

Mr. Andrew Welsh: Will the Minister give way?

Mr. Sainsbury: I must make progress. I have been over-generous and I know that many hon. Members wish to speak.
I should also briefly mention Parcelforce. The Government have decided that, if they are to sell shares in the Royal Mail, it would be a rather pointless step to insist on separating out the parcels business while giving Royal Mail greater commercial freedom. The Royal Mail management has made it clear that its customers would wish it to offer a parcel service to complement its letter services. With appropriate safeguards to ensure fair competition, the Government are content for the two businesses to remain together.
The Green Paper also makes it clear that the Government continue to be committed to the development of greater competition in postal services. In particular, any


legislation following the Green Paper will allow the Government to fulfil their commitment to reduce the level of the monopoly closer to the price of a first class stamp.
The Green Paper also sets out a number of other areas in which the Government see scope for greater competition. The guiding principle will, however, continue to be that the Royal Mail must continue to be able to provide a universal service at a uniform tariff. Some degree of monopoly will therefore be necessary to ensure that. The Green Paper also covers a number of other issues of importance to the users of the Royal Mail. It makes clear, for example, that the traditional royal associations will remain and that VAT will not be charged on stamps in the future.
I congratulate the Opposition on choosing the Post Office for today's debate—despite, incidentally, their claim that no debate is needed because everyone agrees with them. The debate is well timed because it is absolutely essential that the way forward we finally choose for the Post Office commands public confidence. May I emphasise again that the Green Paper is a consultative document? We hope, therefore, that today's debate will help to focus on the rational arguments, the real points, that are discussed in the Green Paper and not on the absurd allegations that are propagated by the Opposition.
If the Opposition parties wish to put forward constructive comments—an unlikely contingency perhaps —on any of the options or have concerns about the safeguards we propose, let those points be made. Let us accept, however, that change is necessary. The debate is about how that can be best brought about.
I believe that the combination of our proposals for Post Office Counters and our preferred option for Royal Mail would provide an appropriate and exciting way forward for the future. It would give the Post Office's businesses the real commercial freedom that they need. It would provide opportunities for those directly involved with the future of Royal Mail to take a direct stake in the company—in many cases on special terms. It also would protect the public through a strong and independent regulatory structure, while offering scope for greater consumer choice both in post offices and in the letters market.
We believe that the customer has everything to gain from our policies and much to lose from the Opposition's policies. I commend the amendment to the House.

Ms Kate Hoey: I am pleased to have the opportunity to participate in this extremely important debate on an issue that concerns millions of people.
It is rather sad that the President of the Board of Trade is not here, particularly as it is quite clear that Post Office privatisation is on the right hon. Gentleman's personal agenda. I am sorry that he did not have the opportunity to hear the excellent speech made by my hon. Friend the Member for Livingston (Mr. Cook), who put the argument against privatisation clearly and incisively and explained why Opposition Members and, given what the hon. Member for Macclesfield (Mr. Winterton) said, perhaps many Conservative Members want to keep the Post Office together in the public sector and stop its being privatised.
It is clear that the Government have no mandate to conduct even a debate on the proposed privatisation of the Post Office—there was no mention of such privatisation in their election manifesto. As my hon. Friend the Member

for Livingston said, privatisation of the Post Office was a privatisation too far for the leader of privatisation, Mrs. Thatcher. It is strange that the President of the Board of Trade is pushing for a privatisation that, even at the height of privatisation, the then leader of the Conservative Government, Mrs. Thatcher, was not prepared to make.
The Minister has said that the Green Paper will be treated as a consultation document, but we already know what people think about the proposal. In March 1994, the first MORI poll found that 68 per cent. of people opposed privatisation and, as has already been noted, 53 per cent. of those polled were Conservative voters. The same poll discovered not just that people are opposed to privatisation, but that 81 per cent. of the public want the Post Office to be offered more commercial freedom while remaining in the public sector. The Opposition and 81 per cent. of the public are therefore in favour of the commercial freedom option offered in the Green Paper.
The consultation exercise will last just three months and during most of that time the House of Commons will not be sitting. I have not the slightest doubt, however, that the vast majority of responses received by the Minister will be opposed to privatisation. Will the Minister tell us what criteria the Government will use when making judgments during the consultation exercise? If between 90 and 99 per cent. of the public responses oppose privatisation and support giving the Post Office more commercial freedom, will the Minister give a commitment that that will be the end of the matter? As my hon. Friend the Member for Livingston has said, if we want commercial freedom, we can have it today. The two Front Bench teams could get together and, in agreement with the Liberal Democrats and all other parties, work out the rules to give that freedom to the Post Office.

Mr. Malcolm Bruce: We must also consider what will happen to the Post Office during the privatisation process. It is asking for commercial freedom now and everyone except the Government, who insist on delaying matters for another 18 months to get unnecessary legislation through the House, agrees that it could be given commercial freedom. Does the hon. Lady agree that the Minister should consider the effects of the Government's policy?

Ms Hoey: I agree absolutely. The Government are holding back the country because they are holding the Post Office back from being able to compete internationally and on the European market. It is ludicrous that we have been waiting two years for the Green Paper, especially as it includes an option that all the Opposition parties can support. If today's debate does anything, I hope that it will show that there is cross-party support for keeping the Post Office in the public domain while offering it greater commercial freedom.
Why are the public so opposed to privatisation? It is not as though there has been a huge Labour party campaign to try to get people to oppose privatisation. We will launch such a campaign, but we already know that there is great support for retaining the Post Office in the public sector because the vast majority of people are quite happy with it. They know that it gives them a good service. They know that it is making a profit—little in this country makes a profit today—and that a large proportion of that profit is given back to the Government to be used for other


purposes. There is no widespread dissatisfaction with the service offered, which was not always the case in previous privatisations.
We all rely on an efficient, trustworthy Post Office. It is worth remembering that about 25 million households are visited by a postman or postwoman each day. That represents terrific contact between postal workers and the public. People care about the service. Such strength of feeling does not exist only in inner-city areas. It is particularly strong in rural areas, where for many people the arrival of the postman or postwoman on a bike or in a van is a real link with civilisation. I come from a rural area in Northern Ireland that is just the same today as it was in my youth. One of the key events of the day was the arrival of the postman—in those days there were no postwomen—because he did not bring just the hoped-for letters from relatives abroad and all sorts of other people, but the local paper. If the postman did not arrive, we did not get the local paper. The postman also brought messages and all manner of other things, which was probably not in his job specification but it was part of the social service that he provided. That still goes on to a greater or lesser extent in parts of the country and it would be a tragedy if it disappeared.
None of us has confidence in the Government's commitment to a nationwide letter and parcel service with daily delivery to every address in the country. The problem is that the people simply do not believe them, just as they did not believe what the Government said or the commitments that they gave previously.
There is no commitment not to transfer to an Americanised system in which people must go to the bottom of their high-rise block of flats or to the end of their lane to collect the mail. There is no reason for such a reduction in service, but that is what would happen if the Post Office were privatised.
The Government have made no commitment to a second delivery which, as it does not make a profit, is a service. It continues because it is a public service. It is one of the social commitments and extras that the Post Office has been able to provide. Only public ownership has prevented the Post Office from abolishing the second delivery.

Dr. Liam Fox: During Report stage of the Telecommunications Bill, the Opposition spokesman said that, after privatisation, people in rural areas would never be connected to the telephone system. Labour was wrong then—why should the hon. Lady be right now?

Ms Hoey: If the hon. Gentleman reads in Hansard tomorrow what my hon. Friend the Member for Livingston said, he will see that my hon. Friend answered that specific point, so I shall not go over it again.
A cross-subsidy amounting to about £30 million a year is provided to keep less viable post offices running. I shall not go into too much detail about other services such as the 180 post buses, which provide the only form of transport in some rural areas, as I am sure that others will want to mention them.

Mrs. Angela Browning: Will the hon. Lady give way?

Ms Hoey: No. Eighty per cent. of those post buses are already subsidised. If we lose that opportunity—

The Parliamentary Under-Secretary of State for Technology (Mr. Patrick McLoughlin): rose—

Ms Hoey: I suppose I had better give way. Are you in charge now?

Madam Deputy Speaker: Order. I am in charge.

Mr. McLoughlin: And the hon. Member for Vauxhall (Ms Hoey) should always remember that. Can the hon. Lady tell me a little more about the subsidy for rural services that she is talking about? For example, where does it come from?

Ms Hoey: On the whole, it comes from local authorities, but if there were no cross-subsidy there would be no opportunity to transfer extra money from one part of the Post Office to another.
Another matter that must be mentioned again is the revenue provided by the Post Office to provide the articles-for-the-blind service. I do not believe the commitment that has been given with regard to that service either. I do not believe that, once the Post Office is placed beyond democratic accountability to Parliament, such a service will be allowed to continue. The profit margin of the Post Office is usually about 5 per cent. of the gross turnover. If there is any change which results in the Post Office being taken out of the public service, what are considered as necessities for some people will be seen as extras by a private company and they will be dropped.
I know that this is an important day for some hon. Members from Northern Ireland and that, therefore, the attendance of hon. Members from Northern Ireland is not very high. Northern Ireland has a particular difficulty with its postal service because of the peculiar nature of the political situation there. I pay tribute to the dedication of the postal workers in Northern Ireland, who have continued to provide a service throughout the great difficulties of the security situation across the sectarian divide. They are a special part of the public service in Northern Ireland.
In terms of unemployment and the economic situation in Northern Ireland, any reduction in postal jobs would be absolutely terrible for the economic interests of that community. Belfast has the return letter section of the Post Office. At present, some 300 jobs are provided in that section. If the Post Office is put in the private sector, one of the first things that will happen is that the return letter section will get the chop. If it does not get the chop, people will certainly have to pay a large amount of money to get their letters back. That is another area that must be examined.
I mentioned earlier the way in which communities are linked to the postal service. When I first came to England as a student, my mother, at 4 o'clock on a Sunday afternoon—there were Sunday collections in those days; they then stopped but, fortunately, they have resumed—would post whatever they had for lunch that day, either a piece of chicken or perhaps some bacon, in a letter sealed in whatever way she thought best. It was delivered to me at 7 o'clock on Monday morning, not quite still warm but certainly fit to be eaten. I have had an affection for the Post Office ever since. The miracle of someone being able to put something in the post at 4 o'clock on Sunday afternoon that could be eaten in north London at 7 o'clock the next


morning is something of which we should be proud—[Laughter.] Hon. Members may laugh, but that is precisely the emotional attachment which people have for the Post Office and postal workers—[Interruption.] Some may say that it is irrational.
Tory Members are silly if they underestimate the feeling—it is almost love—that people have for the Post Office. There are many reasons why the Government will lose the next election, but if they go ahead with privatising the Post Office, that will certainly be one of them. They should not underestimate the power of the people on this issue. Thousands of people will be writing letters. The consultation exercise will give the Government one result. Today, I want to hear the Minister pledge that he will fulfil whatever the people decide on the issue.

Dr. Keith Hampson: The problem with the speech of the hon. Member for Vauxhall (Ms Hoey) is that it conveyed, above everything else, total and utter complacency. The hon. Lady started by saying that people are happy with the Post Office. That is currently true. But the President of the Board of Trade is trying to secure change, reform and, in particular, new private investment to ensure that we have a better tomorrow—that we improve the situation, rather than let it deteriorate. If people realised what we identified in the Select Committee report, they would also realise that there are many serious threats to the happiness that they currently experience with the Post Office.
For the first time, there is a potential decline in the standard of service. One of the reasons for that is the level of investment on the one hand and competition on the other. To meet the increasing competition that the Post Office faces, not only from private sector companies in this country but from postal services in other countries, there must be more investment.
I do not think that a single person in this country or a single hon. Member believes that a Labour Government would be more generous in terms of public sector investment than anything that we have seen so far. Would a Labour Government seriously stop the external financing limit? Is Labour saying that if the Post Office is profitable, will not take money back into the Treasury? Labour never did that with any nationalised industry. Would it seriously do it now?
Of course, if Labour does do that it will face exactly the same problems as those faced by the management of the Post Office this very year. Managers cannot invest in post buses on the scale that they would like; they have had to cut their investment in postal vans and other equipment because the Treasury has taken more and more of the Post Office's profits. No matter what Government are in power, that is what the Treasury will always do. Perhaps the Labour Front-Bench spokesman would like to announce that the Opposition will scrap the external financing limit system and the Treasury will no longer take the money—

Mr. Jim Cousins: I am grateful for the opportunity that the hon. Gentleman has afforded me. On page 17, paragraph 93, of the Select Committee's evidence he speaks about a halfway house and urges his right hon. Friend the President to adopt it. Does the hon. Gentleman stand by his commitment to a halfway house, or has he abandoned it?

Dr. Hampson: Nothing on the record states that I backed a halfway house. If the hon. Gentleman reads the whole transcript, which he clearly has not done, he will see that I put to the President of the Board of Trade examples from across the world—from New Zealand to Sweden, from Canada to Holland and Germany. In all those countries the post offices are being steadily commercialised to the point of public limited company status, and then on to privatisation. I kept asking the President why our system cannot do likewise. I kept being told that it was because the Treasury would not allow it.
The Select Committee decided that if we do not go ahead and privatise the whole service, we should at least free it up—and that is one of the options in the Green Paper. Certainly a certain amount can be done to provide greater flexibility and to allow the service to retain a higher proportion of its profits. That, too, is in the Green Paper. Conceivably we could change some of the regimes that control joint ventures, but only up to a point.
In the end there are two strict disciplines. The first is that, even under Labour, no Government could allow a public corporation to go on borrowing money in the private markets regardless, because that will only add to the public sector borrowing requirement. So although we may allow the corporation more freedom in commercial decision taking, that fundamental discipline will remain. All the Treasury mandarins will insist that the Post Office cannot indiscriminately add to the PSBR.
Equally, the Post Office will never be given enough freedom in that way. Post Office managers have pointed out that they do not want a halfway house. They want to be certain, when they draw up their plans for investment and for raising the money for that investment, that they can take the decisions themselves. They do not want to have to return to the Treasury for its authorisation.
Of course the process can be improved. We referred to this in the Select Committee as the fishing licence syndrome. It took the best part of a year of argument between two Cabinet Ministers to ensure the freedom of the Post Office to sell fishing licences. I am delighted that the President of the Board of Trade won the battle with the Treasury, although I doubt whether that triumph will go into his obituary. But why on earth were Ministers arguing about it at all? There may be some liberalisation, but the Post Office would still have to get approval for certain projects. That takes time, and it is not the sort of commercial freedom that the management wants. Nor is it what is happening elsewhere in the world.
Clearly, the system has to change. I believe that hon. Members on both sides of the House agree—they certainly agreed in the Select Committee—that the nationalised framework cannot be maintained. Given the competition and the opportunities, it is just not viable.

Mr. Cousins: rose—

Dr. Hampson: I have already given way to the hon. Gentleman, who I suspect will make a speech of his own.
A Labour Government in charge of a public corporation controlled by the Treasury might like it to have certain privileges that gave it an advantage over the private sector. That gives rise to another of my criticisms. The private sector will not be happy with the sort of deals in which a public corporation would want to get involved. The Post Office was prevented from buying an airline. It might be extremely sensible for it to acquire its own airline, but that


would enable it to compete with other airlines for all sorts of business. The private sector companies would have something to say about a corporation, backed by taxpayers' money and Government guarantees, behaving in that way.
The Post Office rightly wants to go into bulk-mail deals with printing companies—it might even want to buy one, with considerable knock-on effects.
In theory, such deals are excellent, but they could go wrong, and they would give the Post Office a privileged position vis-à-vis its competitors. They could also go seriously wrong, and if the state picked up the financial pieces, that would only underline a measure of protection that the private sector does not enjoy. For all those reasons a halfway house is not acceptable.

Mr. Malcolm Bruce: Is the hon. Gentleman seriously suggesting that if a privatised Post Office got into financial difficulties a Government could walk away from it and not pick up the pieces? Does he accept that private companies might regard it as unfair that a privatised corporation continued to have the protection of a publicly guaranteed monopoly? Is there not some unfairness in both solutions?

Dr. Hampson: The truth is that this House must produce the legislation, which must contain certain fundamental reassurances for the British public. We all accept that the Post Office must have social responsibilities. In the case of British Telecom, the privatisation Bill included certain terms and conditions—BT has to maintain rural services and loss-making rural phone boxes. Similarly, in this case we shall require a universal service to all parts of the country, however remote, and at a standard price.
Secondly, there will have to be a regulator. We are learning as we go on about the regulatory process, and the Post Office regulator will have to be effective and tough.
Thirdly, whatever Opposition Members may say, the Government are not privatising the Post Office: this is a half-privatisation. There will still be the old links, and all the concerns about the connections between the Royal Mail, the Post Office network and the post offices in our high streets are misguided. They will be preserved. Moreover, for the first time the work force will have a say. I should like at least 10 per cent. of the business to go to them, thus involving them in the business and providing yet another safeguard for the social responsibilities of the service.
To answer the hon. Member for Gordon (Mr. Bruce) further, I am optimistic about the growth of this enormous £4 billion enterprise. It has the capacity to raise huge sums on the financial markets. I see no reason why a privatised Post Office should be any less of a success story than BT or British Airways. Why do people spend all their time dreaming up scare stories? All the worst imaginable options are being put to the British people in order to frighten them. The trouble is that the Labour party has such a narrow vision, its policies are so much determined by its wish to stay in the past, and it is so influenced by the unions' support that it will not look beyond the way in which things have always worked.
There is a new world of opportunity out there, ready to be seized. Why cannot the corporation be successful worldwide? We have a chance now to increase its international presence and to make a great success of it. We

have an opportunity to improve the quality of the service that we give to our domestic customers as a result of the growth and success that that private operation will enjoy, especially on the international scene, and we shall have bold and imaginative developments, such as share ownership for the work force. There will be improvement internationally, and improved customer provision and service throughout the country—in rural districts as well as towns.
We can make that positive achievement if we pursue the option in the Green Paper—a balanced partnership between the public in the form of the Government, the public and the work force as shareholders and the management of the corporation. I believe that the management want to press ahead with that option, but people do not trust the Government and the Treasury—and for heaven's sake, given what Opposition Members say, day in and day out, why should they?
For heaven's sake, let us seize the opportunities. This will be a great success story for the Post Office, for the Royal Mail and for its work force.

Ms Judith Church: I thank you, Madam Deputy Speaker, for allowing me to make my maiden speech in this important debate, when so many hon. Members wish to speak.
First, I pay tribute to my predecessor, Bryan Gould, who served the people of Dagenham—and, before that, the people of Southampton, Test—loyally and energetically. Bryan had a distinguished political career, spanning two decades, during which he worked on trade and industry, economic and environmental matters. I know that he will be missed by many people in the House and in Dagenham, and I am sure that the House will join me in wishing him well in his future career.
My other predecessor, John Parker, was Dagenham's first Member of Parliament, a Member for 48 years and Father of the House. Some Members here today will remember him for his work as chair of the British-Yugoslavian Parliamentary Group. I can imagine his sadness, had he been alive today, at the tragedy that has unfolded in that country.
I am proud to be the third Member of Parliament to represent Dagenham. Built in the 1920s and 1930s, it has a long-established and close community, with strong traditions of public service. Many of its local councillors have served for 30 or 40 years. It is an area of great opportunity, which is crying out for investment, and rejuvenation of its housing and regeneration of its industry.
Dagenham has the largest manufacturing work force in London, with successful companies at the leading edge of technology, such as the Ford Motor Company, GPT Telephone Cables and Rhone Poulenc Rorer. Those companies have not succeeded through paying low wages and having poor working conditions and low health and safety standards. I know that because, before coming to the House, I worked in industry, including seven years as one of Her Majesty's inspectors of factories.
There I worked with both sides of industry to improve workplace standards. That experience proved to me that only those companies, large and small, that invest in people by providing high-quality training and good working conditions can compete and win in today's global markets.
I believe that national economic success goes hand in hand with the provision of high-quality local services. Strong economies invest in modern, vibrant services—schools, housing, transport systems—that enrich and improve the lives of their citizens.
The people of Dagenham rely on their local postal service, run in the public interest for the benefit of all. Now the Government want to go ahead with the maddest, saddest privatisation of all, that of the Post Office—mad because our Post Office is one of the most successful postal businesses in the world, sad because the existence of an efficient national postal service is the hallmark of a modern economy.
However, the Government cannot find any new test of efficiency. They cannot identify any fundamental failings. The Post Office is not a creaking system in need of overhaul; far from it. The Post Office is efficient and competitive, a tribute to public enterprise. The Government cannot bear that enterprise and innovation to be in the public sector.
Let me pause for moment, and examine what the President of the Board of Trade has to say in his Green Paper on the future of postal services:
The Post Office has for centuries made a vital contribution to our national life.
Who could argue with that?
The Post Office is one of the nation's unifying forces".
Who could argue with that?
The Government is committed to the maintenance of these services.
That is where the argument breaks down.
The Government will not do that by modernising the Post Office. They will do it by destroying it, by pushing yet another of our country's great national assets away from our people and towards pin-striped predators—or at least, they will try.
People know what privatisation means—a two-tier postal service where the standard provision becomes so poor that it is laughable.
The President of the Board of Trade could have pledged today, had he been here, to back the Post Office in its drive to compete and sell in Europe, but he will not unless it is removed from the public sector. He could have pledged to protect the consumer from dramatic price increases, but he will not, and, as in the case of water prices after privatisation, which have increased by 67 per cent., the cost of the first class post will increase in leaps and bounds. People are already asking, "Which will come first, the 50p first class stamp or a general election that will save us from that fate?"
The Government will try privatising the Post Office, which is so unpopular among their supporters, let alone people throughout the country, but trying is all that the President of the Board of Trade will be able to do. It is all that he has done since he first set up the review of the Post Office's future two years ago this month. It is not the 30-page Green Paper that has taken the time; it has been the politics of it.
The President of the Board of Trade knew that he could not even begin to get privatisation through without a great deal of persuasion, not of the Opposition, not even of the country, but of his own colleagues. So, aided and abetted by senior Post Office managers, who, like the rest of the privatised sector, can smell the money they can make

through that privatisation, the President thinks that it has got to the point where it might—it just might—get through its stages in the House and elsewhere.
It is not a genuinely consultative Green Paper, putting forward arguments objectively. The best option for the Post Office, and for Britain, as we have heard today from my hon. Friend the Member for Livingston (Mr. Cook)—greater commercial freedom while keeping the Post Office owned by and for the whole country—is simply dismissed out of hand. The Treasury "will not wear it".
Full privatisation is no good either, because the Government
recognise
that
many people would prefer a closer link between the Government and Royal Mail than that option would provide.
In plain English, the Government recognise that many people want to keep the Post Office just as it is, operating for everyone in the country, on behalf of everyone in the country.
We are therefore left with a fudged and bungled operation—partial privatisation, with the Government keeping 49 per cent. of the equity. Why? Because that is another way of trying to smuggle this astoundingly ill-judged privatisation past the people.
The Government will not succeed, because, when people start to realise just what the Government are planning to do to their Post Office, there will be a large increase in the Post Office's business. That has already happened, as constituents in their thousands, not only in rural areas but in inner cities and suburbs, write to tell Members of Parliament that they do not want their post office, a vital part of the daily life of most people in the country, to be privatised. That is when Conservative Members will suddenly realise that the Green Paper on the future of postal services is something else—a Green Paper on the future of their jobs.
Labour's policy on the future of the Post Office is right, because it is the policy of the people who use the Post Office. They want a good service, and they are getting that now. They want a nationwide price, a national network of post offices and nationwide delivery to every address in the country, not just to those from which the private sector can make the most money.
There is a case for positive change in the Post Office. The Post Office must constantly change to remain the world's best. It must be given the commercial freedom that its management seeks, with the full support of its work force, sub-postmasters and sub-postmistresses and its customers. People now know what privatisation means—big salaries for a few at the top and big prices for the customers. That is what happened with electricity, gas and water. We will not let it happen to our Post Office.

Mr. Edward Leigh: It is a great pleasure to follow the usual courtesies and congratulate the hon. Member for Dagenham (Ms Church) on her speech. I thank her on behalf of the whole House for her kind words about her predecessor Bryan Gould, who was and is held in enormous respect in the House, not just because he was a rebel—there is no harm in being a rebel occasionally—but because he was a thinking and a principled one. We wish him every success and enjoyment in New Zealand.
I also congratulate the hon. Lady on the competence with which she delivered her speech, which was a classic of its kind. She spoke with great knowledge and movingly about her constituency and addressed the arguments extremely well, although we did not agree with all of them. We wish her well. She said that her predecessor but one became Father of the House. I am sure that we will continue to listen to her speeches until perhaps she becomes Mother of the House some time in the next century.
There are two debates about the Post Office—the real debate and the political debate. The real debate about the nature of the ownership of Royal Mail and the degree of commercial freedom that it should have has already been determined not by politicians, not by the House, but by domestic market pressures, and especially by increasingly cut-throat international competition.
The political debate has yet to be determined, and either side could win it in the coming year, although I suspect that the row over any privatisation will soon settle down. The dust will soon settle as it has settled over every privatisation. I want to deal with the political debate because that is where the opportunities and discretions still lie for the Government. I should like to make a few suggestions to ease their path. Perhaps I should first address the real debate.
I was given responsibility for the Post Office as long ago as the spring of 1991. I immediately began a series of discussions with the Post Office and with Sir Bryan Nicholson, the then chairman of the Post Office board. I know that I shall be accused of this, so I freely admit to starting with the view—or, from the point of view of some people, a prejudice—that, in a commercial situation, private companies are better equipped to create commercial opportunities. I accept that I suffer from that view or prejudice, but any objective observer would conclude—certainly all those who advised me soon came to the view—that politics alone has denied the Royal Mail a role in the private sector to which it is well suited.
When I took responsibility for the organisation, I felt that we had dilly-dallied for too long, and that we should grasp the nettle that politics had prevented us from grasping for about 13 years. I set the ball rolling, and it has been rolling for a long time. But the end is in sight, and the Government have said that their preferred option is privatisation. That is in respect of the Royal Mail, but the situation with Post Office Counters is a little different. Just as the overall debate is confused between politics and the real world, so this debate is also confused between Royal Mail and Post Office Counters, which, in effect, are completely different businesses.
Royal Mail is now essentially a pure business operation overwhelmingly concerned with carrying letters from business to business and from business to people. The business of carrying letters from people to people is a small part of the total turnover. Royal Mail is increasingly subject to international competition. The vision of Rowland Hill, an adviser to a former postmaster general, of a uniform tariff and service worked well in a primitive age of bad roads. In strictly commercial terms, it probably does not make much sense, but I quickly add that we do not live in a strictly commercial age, thank God.
In this strictly commercial set-up, there is an enormous social dimension, represented by the daily walk of the postman up the garden path. That is the last daily delivery left. In many ways, the postman seems the last relic of a bygone age. I do not see anything wrong with relics or tradition. It would be an act of consummate vandalism and political madness by the Government to tamper with that tradition of the daily walk up the garden path. Let us keep our uniformed postman. Let him roll on undisturbed into the next millennium, but in the process please let us preserve some semblance of reality.
For years, Post Office management have waged with the Government a forlorn battle to deliver mail "once over the ground". Whoever owns the Post Office, that has to happen. It is important that it happens once a day, and that could and should be guaranteed.
The public view the Post Office largely through the wrong end of a telescope, at the postman delivering his letters. The commercial reality is of increasingly cut-throat international business in which other post offices, particularly those of Denmark, Holland—about which we have heard—and Germany, freed of Government ties, would increasingly cream-skim profitable bulk business from our Post Office.
The counters business is even more of an irony. It is largely a shop window for Government services, mainly social security, but 19,000 of those 20,000 shop windows are privately run, albeit under ludicrously severe Government control and restriction on what they can and cannot sell. In short, things are in a mess, contrary to the rosy view that is often painted of the Post Office. The public view of a successful, friendly organisation is in reality under increasing commercial threat to its viability, internationally to Royal Mail and domestically—a point that has not so far been stressed in the debate—to Post Office Counters.
If nothing is done, if we take the easy way out politically—I fully accept that it would be the easy way politically: it is the route for which Labour has opted—the Post Office is doomed to gradual decline. If we are to save the Post Office, we must have the intellectual honesty and vigour to propose solutions that will work. For instance, we must not say that somehow the public can own an organisation but not control it and be responsible for its borrowing.
The case against so-called commercial freedom in the public sector was made brilliantly by my hon. Friend the Member for Leeds, North-West (Dr. Hampson) and by the Minister of State. It is set out strongly in chapter 5, paragraph 5, of the Green Paper. Labour speakers have signally failed to answer the points set out there.
The Green Paper states that the controls that the Government levy on the Post Office
reflect the fact that the risks assumed by nationalised industries are ultimately underwritten by the taxpayer. In particular, Government controls over borrowing by public corporations (all of which, by definition, fall within the public sector borrowing requirement (PSBR)) provide a discipline over all funds which are raised with the backing of the taxpayer and for which the Government is ultimately accountable. Without such controls, nationalised industries would have a clear advantage over commercial rivals".
Labour Members have not answered, and cannot answer, the overwhelming case against so-called commercial freedom in the public sector. It is a red herring and a canard, and simply does not work. In the real world,


one must make a choice between a nationalised industry that one owns and ultimately controls, and a privatised industry.

Mr. Cousins: rose—

Mr. Leigh: The Opposition spokesman is pregnant with a question, so I give way to him with some pleasure. I hope that he will answer that point.

Mr. Cousins: Does the hon. Gentleman think that the markets will believe that a company in which the Government will have a 49 per cent. shareholding could ever go bankrupt?

Mr. Leigh: The hon. Gentleman fails to understand the point made by my hon. Friend the Member for Leeds, North-West (Dr. Hampson). Had he listened, he would have heard my hon. Friend talk about all the joint ventures that the Post Office wishes to undertake—for example, buying a printing business.
Is the hon. Gentleman suggesting that joint ventures, purchases and risks will ultimately be underwritten by the Government? That is what would happen if we retained public sector control of a business but allowed complete commercial freedom.

Mr. Cousins: The most significant example offered by the hon. Member for Leeds, North-West (Dr. Hampson) was that of the airline venture. I remind the hon. Member for Gainsborough and Horncastle (Mr. Leigh), who was the Minister who stopped it, that the venture involved the Post Office taking a 49 per cent. share. Is he really saying today that, as a Minister, he vetoed a 49 per cent. share because the business was still in the public sector, but that the whole case of the Green Paper, which depends on a 49 per cent. share, is something quite different?

Mr. Leigh: If I did not allow something that the Post Office wanted to do, it must have been under Treasury instructions.
I commend the Government's balanced package in the Green Paper, which deals with the two fundamental problems facing the Post Office. By selling 51 per cent. of Royal Mail, the new company will become a huge asset to Great Britain plc. It will be able to defend itself against international predators, just as British Telecom and British Gas have done. They have become powerful players in the new global marketplace.
I have always argued that the public must notice no difference. With the help of the regulator, I hope that they will not. Incidentally, what happened to my idea of calling the regulator the "Postmaster-General"? It has obviously sunk without trace since I left the Department. We should resurrect some of the great old titles. Why call the regulating body something as dreary and boring as Ofpost, or whatever?
As a sort of outrider for the Government, I believe that a 100 per cent. sale would make more commercial sense. Why retain 49 per cent. if, as is said in the Green Paper, the Government will not intervene in the company? What is the logic in that, apart from politics? [Interruption.] I accept that politics is important.
The Green Paper states in chapter 5, paragraph 21, that the Government
would not expect to vote its shareholdings on resolutions moved at General Meetings of the company although it would retain the power to do so.
When I was responsible for British Telecom, in which the

Government were a major shareholder, I was under strict instructions from my civil servants not to try to have any direct influence in the company. What is the point of retaining 49 per cent. if we do not make use of it? I apologise for this slightly naughty interlude, but I am sure that my hon. Friends on the Treasury Bench will forgive me.
The public are not really interested in whether the Government own 49 or 51 per cent.; they are interested in the future of the postman, and in service delivery. Why should not the postman become, in time, a real community deliverer, especially in rural areas? In particular, elderly people would welcome someone calling at their doors every day. There is a vast network of people—the postmen—ready and able to visit every door every day. Why are we just using them mainly to post one lonely item of junk mail through a letter box? Why are we not fully using the service that could be provided by the daily deliverer?
Too many people in society are lonely and remote. The postman's job is often low-paid, mechanical and boring. Would he not welcome an upgrading of his role to something more personal and responsible? There is no limit to the services that he could provide—such as milk, newspapers, groceries and personal contact. There is no limit to what elderly or rural people might conveniently receive from a daily community deliverer. We should not allow one of the last of the personal daily services to wither on the vine like so many others. We should use the new commercial opportunity to provide a greater public service.
It has been a titanic struggle to persuade the Treasury to allow sub-post offices to sell a wider range of commercial services. I congratulate the Minister on winning that struggle. However, I suspect that it has happened only because the Treasury reached the sensible view that Royal Mail privatisation would not otherwise be deliverable. It is sensible to keep the headquarters operation in the public sector to reassure the public. However, it actually means very little, as increasingly it would become a clearing house for Government business.
My right hon. Friend has won his battle to allow post offices to pay pensions over the counter. As we know, not to do so would be political madness. I welcome the £130 million-worth of automation announced in the Green Paper. That will help to reduce fraud, and to make the operation more efficient. However, I suspect that, with encouragement and an ever wider use of bank accounts, more and more pensioners will choose not to draw their pensions at local sub-post offices. Therefore, diversifying the business is not only good sense from the Government's point of view: it is essential for survival.
I am disappointed with what the Government say in chapter 4 about the commercial activities in which sub-post offices will be allowed to engage. It is full of mealy-mouthed phrases and I detect the dead hand of the Treasury. It says, for example:
Any displacement of private sector activity would in these circumstances be voluntary…the proposed activity would help create a new market for services which had previously not been available to the public…the entry of Post Office Counters is likely to lead to significant growth of existing markets … Post Office Counters is unlikely to have a significant impact on existing private sector companies".
What do those phrases mean? Do we detect the hand of the Treasury in seeking to tie down sub-post offices in what they can or cannot do? I note that my hon. Friend the Economic Secretary is now on the Front Bench. I assure Opposition Members that sub-post offices are threatened


not by the privatisation of Royal Mail, but by the diminution in their services as more and more people take their benefits through the post. The only way to save them is to give them greater and greater commercial freedom. The mealy-mouthed phrases that I have quoted will not help. Sub-post offices must be given full commercial freedom to deliver services if the essential network throughout the countryside is to be retained.
Overall, the Government have produced a package that is probably the only conceivable one. It could have been identified within months—certainly I and those working with me did so. However, the very length of time that the Government have taken has been a shrewd political move. I am sure that my right hon. Friend the President of the Board of Trade, whom I admire immensely, decided to play it long and allow public and political opinion to mature.
Above all, he has given the senior Post Office management the confidence, which they understandably lacked at first, to insist both explicitly on full commercial freedom and implicitly on privatisation. Even the very Post Office brief provided for our debate mentions the fact that the Germans and the Dutch are moving towards privatisation. That is the real debate among socialist and Christian Democrat Governments around the world. They know that there is no choice. Only the British Labour party has a black hole in which all creative ideas are sunk, never to return until they have been proven by us.
The Opposition are wedded to a concept which, in their heart of hearts, they know simply will not and cannot work. We need only consider the unlikely event of a Labour Government owning the Post Office, yet tamely accepting a massive increase in Post Office borrowing to innovate, or a Post Office determined to implement unpopular decisions such as "once over the ground".
What is Labour's policy on "once over the ground"? Would it tamely allow a Post Office that it controlled, albeit with so-called commercial freedom, to implement a policy that was fundamentally unpopular with its constituents? Of course not.
One has to reach the conclusion that this so-called commercial freedom in the public sector is a political gimmick—no more, no less. I understand, however, that, if elected, a Labour Government would buy back control of Royal Mail. That leads me from the real debate to the political debate. We must ensure that the public appreciate what a disaster that would be. The key lies in the effectiveness of the regulator or the postmaster-general in ensuring a peaceful transition to private ownership, but it depends equally on the nature of the sale.
I am delighted that Post Office workers are to receive 10 per cent. of the 49 per cent. sold. It should give them a stake in the business. I should like that stake to be bigger, but I understand that stock exchange rules forbid the work force from receiving more than 10 per cent. of the shares.
I understand from the Library that rule 4.8 of "The Admission of Securities to Listing", usually known as the Yellow Book of the stock exchange, states:
preferential allocation is allowed in respect of the securities not placed firm, normally only to existing shareholders, directors, employees and past employees of the issuer of its subsidiary undertakings, up to a maximum of 10 per cent. in aggregate of the value at the offer price of the securities not placed firm.

That makes no sense, but it is a stock exchange rule. The only point we need to understand is that we can sell off only 10 per cent.
I have been doing some research, and I understand that, after incorporation but before flotation, stock exchange rules do not apply. I hope that the Economic Secretary or the Under-Secretary of State will clarify that. There are separate rules of public sector issuers set out in chapter 22 of the Yellow Book, which state that such issues "need not comply" with the provisions of chapter 4.
The Library contacted the stock exchange and informed me:
The Exchange, however, was at pains to stress that were the Post Office to be privatised it would obviously be a very special issue and special conditions would probably apply.".
My contention is that it would be possible to sell a greater share of the 49 per cent. to Post Office workers. The possibility of selling a large part of the business to the work force is an attractive one. The greater their stake, the less enthusiastic the workers will be about a Labour Government getting their sticky and impecunious fingers on the business in which they themselves have a large stake.
What the Labour party will assume to be a popular policy of buying back a business could well rebound on them, even if Post Office workers have only 10 per cent. of the business. If I am right, it might be possible to sell them more than 10 per cent. of the business.
We could go still further. We should commit ourselves in our manifesto to introducing legislation to sell a further tranche of shares to Post Office workers so that Post Office workers will know that, if a Conservative Government are elected, they will have the opportunity of buying more shares at a preferential rate, but that if a Labour Government are elected, they will lose that right altogether.
Of course, we could sell the shares—I am doing further research on it—on the basis that they are paid dividends like anybody else, but the shares can be sold only into the work force pool, ensuring that the work force always retain a powerful and profitable input into the business. All that would be on top of what would be a popular sale to the public, extending opportunity and ownership in the way that we know so well.
In conclusion, we can produce a popular package not only doing what is right for the business, but convincing the work force and the public alike that we can create a dynamic business for the future in which sub-post offices, particularly in rural areas, sustaining village shops and providing an essential community service, will be given a new lease of life, in which postmen can acquire a profitable stake in their own business and be given opportunities for extra and rewarding work and in which the public will have confidence that a great British company is fighting for Britain abroad and at home, delivering the traditional service that we all value.

Mr. Malcolm Bruce: I join the hon. Member for Gainsborough and Horncastle (Mr. Leigh) in congratulating the hon. Member for Dagenham (Ms Church) on her excellent maiden speech. It demonstrated her confidence as a new Member and her knowledge of her own constituency and its industries. I am sure that we shall hear a great deal more about that in her time here.
We all appreciated the hon. Lady's remarks about Bryan Gould, who had friends across the House, was well liked


by us all and will be missed. I hope that the hon. Lady will not take it personally if I say that the only reason why I wish he were here today instead of her is that he might have been able to tell us exactly what happened to the Post Office in New Zealand as a result of the ideas that the Government are bringing into play. I am sure that we shall hear a great deal more from the hon. Lady and we look forward to that.
This is not an early debate—it is extremely late. It is more than two years since the Post Office started its campaign of pressure for greater commercial freedom. As the hon. Member for Vauxhall (Ms Hoey) said, the Government have been holding the Post Office back. It is extraordinary to hear passionate speeches from Government Back Benchers about the enormous need to enable the Post Office to respond to competition when it could have been doing so a long time ago were it not for incompetent and dithering Ministers who even now have not been able to produce a clear-cut, comprehensive or intellectually coherent set of proposals.
The Green Paper is confused and contradictory. All sides accept that the status quo is not an option and nobody wishes to defend it, but how do we deliver greater commercial freedom and maintain a high standard of public service? In reality, there is no disagreement about that either: the argument is about how to get there. It is absurd for Conservative Members to argue the difficulty and then to suggest that the only possible solution is the one produced by the Government. On 1 February the President of the Board of Trade told the Select Committee that this was an extremely complex and difficult issue; it has not suddenly become easy and it would be foolish for Conservative Back Benchers to pretend that it has.
The constraints currently operating in the Post Office have been and are Government imposed; they do not come from anywhere else. The Government appear to be saying, "Because we have imposed a set of unacceptable, inflexible restraints on the Post Office, we must privatise it because we lack the imagination to change the rules to meet the needs of the Post Office."
The Government use the Dutch post office, or at least the competition from Holland, as a prime source of authority for their argument. We are told that the Post Office must be freed to respond to competition, especially from the Dutch. And so it must, but the competition is coming from a Dutch post office which is currently operating—and has been for 25 years—with exactly the kind of commercial freedom that is proposed and rejected in option one of the Government's Green Paper. It is true that the Dutch Government are planning to sell shares in their post office—but only 30 to 40 per cent. of them. The Dutch have no difficulty in grasping the distinction between 49 per cent. and 51 per cent. Clearly, a Dutch coalition Government—that is what they usually have in Holland—do not have the ideological hang-ups of an intellectually split British Conservative Government.
The issue appears to have become a football for leadership contenders who need to express their right-wing credentials in public, in a sense flirtatiously. They need to act like political tarts to see how much support they can get to secure their political future at the expense of the real needs of the Post Office, which requires a more disciplined and intellectual approach. The Government are saying, "We have tied our own hands and now we cannot do anything because our hands are tied." They have adopted

an absurd position. In the meantime, during the past two years they have been messing about with the Post Office in an unhelpful and fruitless way.
Two years ago, the President of the Board of Trade came to the Dispatch Box to tell us how essential it was to sell off Parcelforce as a separate entity. I have opposed that throughout. I believe that it has been an absolute disaster for the consumer and has achieved nothing in improved delivery of service. However, I welcome the fact that the Government have acknowledged the error of their ways and accepted the case for bringing letters and parcels back together. The argument also reinforces the fact that parcels and counters are not separate and distinct, as Conservative Back Benchers are arguing.
I will illustrate that with an anecdotal experience of my own. I complained to my local postie that, not being home much of the time, I was fed up with being told that my bound copies of Hansard were available for collection at a parcels office six miles away. He told me that he was not allowed to leave parcels if I was not home. I do not want to get that postie into trouble, but I have come to an arrangement with him. He said that he could leave parcels for me at the local post office 200 yards up the road. I was expecting a parcel of books—not Hansard—that I wanted to read as a matter of urgency, so I told the postie that I would appreciate it if he would do that. In fact, however, I did not collect the books for some days after they were delivered and when I asked at the post office for the parcel the lady behind the counter turned to her colleague and said, "Gladys, what do we charge for storage?" I hasten to stress that it was a joke, but the serious point behind it is that Post Office Counters was essentially saying, "The parcels service is nothing to do with us; we do not see parcels business as part of our job, because we are not paid for it." My concern about the separation of Post Office companies into different ownership is that traditional co-operation will disappear.
The assertion that there is no case for keeping counter business and the Royal Mail together should not readily be accepted, and it is not convincingly argued in the Green Paper. It was included as a political expedient, in the hope of buying off threatened Conservative Back-Bench rebels. I say to them—I am sorry that the hon. Member for Macclesfield (Mr. Winterton) is not in his place—that they had better consult. They may return from the summer recess with a rather less sanguine view of the Government's case.
As to the Royal Mail proposals, the President of the Board of Trade has argued—and specifically did so to me in his evidence to the Select Committee—that giving the Post Office commercial freedom is unfair to private sector companies. I have consistently argued that, by the same token, giving a private company the protection of a monopoly will also be unfair and companies will complain about it. There is no simple solution to that dilemma, as the Government suggest. I can imagine people saying, "We want the Post Office monopoly removed to give us a level playing field." We all know that the consequence of removing the Post Office monopoly will be that a universal service to every household, every day, will collapse. That is a dangerous precedent.
The Government say that Post Office borrowing must be considered part of the public sector borrowing requirement. That is not the case with the Dutch or French Governments, so there is no reason why it should be with the British Government. It was never the case in all the


decades when the Government were a major shareholder in British Petroleum. The Government may argue that BP was different because it was an international company dealing in commodities.

Mr. Cousins: There was British Nuclear Fuels Ltd.

Mr. Bruce: There are many examples—the BBC was also mentioned. The Government are able to make a distinction when it suits them.
The hon. Member for Livingston (Mr. Cook) informally told me that the PSBR and Treasury rules are not a science but an art meant to serve the needs of the Government and the public. The Government are using them as an ideological blunt instrument, which is not relevant to current needs.
Comparisons were made with BT, but its privatisation came at a time of dramatic technological change, which allowed BT to provide cross-subsidy services and to generate enormous profits. That gave the impression of a windfall benefit which would have occurred in any case. I am not saying that BT's privatisation did not bring benefits, but it is not a valid comparison.

Mr. Peter Ainsworth: Supposing that the hon. Gentleman's recommendations were accepted, the Post Office taken out of the PSBR and the external financing limit reformed in the way that he suggests, what would be the effect on the gilts market and the Government's ability to raise capital there?

Mr. Bruce: The hon. Gentleman knows perfectly well that it would not be much different from the Government having 49 per cent. of the Post Office—as a previous exchange demonstrated. It is not possible for the Government to walk away from the Post Office in any case. They can say that the Post Office is entitled to raise private money but that the Government will not underwrite risk capital. It mystifies me that right-wing Members who claim to be radical have so little imagination. It is possible to find different options and solutions to meet different needs. Difficulties are being manufactured to support an ideological case rather than because there exist cast-iron, rigid, inoperable or unchangeable rules.
I said that the separation of the Royal Mail and Post Office Counters would be artificial. In the long run, it is likely to prove unsustainable. It was suggested to me by someone inside the Post Office that separation is a car park solution—a buy-off while things are sorted out, but not a permanent solution. Everybody acknowledges that POC needs investment as well as freedom to develop additional services. The Green Paper does not make clear where that money is to come from, but only states that the Government recognise the need for urgent modernisation and investment in computer equipment. It identifies a cost of £140 million, which it is hoped will come from the private sector.
If that money is to come from the private sector, is that not privatisation by the back door? It appears that services are being kept in the public sector, but so much of the money would be raised from the private sector that the operation would effectively be privatised. In response to the intervention of the hon. Member for Surrey, East (Mr. Ainsworth), if it is all right for Post Office Counters to raise

£140 million on the private market, what is the difference between that and the Royal Mail? The Government contradict themselves at every twist and turn.

Mr. Cousins: The Post Office has accumulated £1 billion of public sector funds as a result of its commercial successes over the past 10 or 12 years. If it were privatised, there would be nothing to stop it switching out of those public sector funds into other kinds of investment. That would also affect Government finances.

Mr. Bruce: There would be an immediate loss of access to revenue, plus a continuing loss of some of the dividend that might otherwise be paid—although the Government are shrewd enough to realise the need to maintain access to the dividend.
I want to press the Government harder on what is meant by retaining the right to determine for Post Office Counters what is fair competition. The hon. Member for Gainsborough and Horncastle (Mr. Leigh) was right to make reference to a lot of mealy-mouthed words that need explaining. There is a danger that the counters operation is being given the illusion of freedom but that that will turn to disappointment because the Government have decided that they will not allow the counters to develop certain operations. I am a little more cynical than the hon. Member for Gainsborough and Horncastle. Given the experience of recent years, it may be that a rich backer of the Conservative party will say, "I don't like those services being developed by Post Office Counters—and if you will not use your powers to block them, I will cease making donations to the Conservative party."

The Economic Secretary to the Treasury (Mr. Anthony Nelson): indicated dissent.

Mr. Bruce: The Economic Secretary snorts. He knows perfectly well that is the way that political favours have been bought in recent years. The idea that the Government back free enterprise, competition and markets is not one that has ever impressed me. I believe that they are buyable by the highest bidder. Some successes were at the expense of other companies. Reference was made to British Airways. It may be a successful and competitive airline, but it has achieved that by destroying every British-based competitor along the way, using all sorts of dubious methods. The Government regard that as free and fair competition, but I do not.

Mr. Clifton-Brown: Will the hon. Gentleman give way?

Mr. Bruce: Not on that point. [Hon. Members: "Oh."] I have raised it many times before in the House and my views are well known. Lord King and Cohn Marshall are tired of hearing them.
How will the Post Office network develop in future? What will be the future role of Crown offices? They currently number 750, but that figure is rapidly reducing. I represent the largest constituency in Scotland and the fastest-growing constituency in Britain; yet it has no Crown offices. When I protested about the closure of Crown offices, the Post Office said, "We will improve the service by offering them to private operators." That happened in the short run, but I know from hon. Members representing other constituencies that that is not always the case.
I have then asked the Post Office what the role of Crown offices is. If there is no difference, or the service its even better, why is it keeping any of them? I have never had a clear answer to that question. We are entitled to know. I suspect that the reason is that the Post Office needs enough of those branches in its network to know how they operate, to be able to train and to provide the management back-up. So I worry what will happen when those offices change hands in future, and do not go to people who have been trained within the Post Office system and have the knowledge and understanding of how they work. What will the Post Office do then?
In my constituency I have been supporting a campaign to open a new post office, at Burghmuir drive in Inverurie.

Mr. Cousins: What is your majority?

Mr. Bruce: My majority is nearly as large as the number of consumers who would use that post office.
I wish to make a serious point. In that instance a private individual, a Mr. Alex Black, is saying, "I wish to open a post office and a pharmacy in a shop unit and in both cases I have to go to some other organisation to get a licence, which is currently being denied." Mr. Black has enormous support from all the residents in the area, and there are plans for building hundreds more houses nearby.
Interestingly, the Crown office that was privatised two years ago is the principal objector to Mr. Black's giving that extra service, which the community wants, and the Post Office is backing the previous Crown office against the new operator. If the network is to be protected, we ought to see new post offices being opened and not just existing offices being closed, especially where there is population growth. Although I represent the fastest growing constituency in the country I have seen only one new post office open in 11 years, but I have seen several closed and many more cut from being full offices to operating community hours. We want to achieve a balance, and we need answers both from Post Office management and from Ministers on how the position is likely to develop.
The Green Paper refers to VAT, but no one has mentioned it in the debate so far. I am not at all happy with what the Government say about VAT in the Green Paper, which is:
the Government is satisfied that none of the options it is considering for Royal Mail and Parcelforce would mean imposition of VAT".

Mr. Cousins: On letters.

Mr. Bruce: Yes, on letters.
I am not satisfied just because the Government are satisfied. After all, the Government were satisfied that they were in the right on the transfer of undertakings directive, and after 11 years they turned out to be substantially in the wrong. That is costing the taxpayer a great deal of money even now. I ask the Minister to undertake to obtain during the consultation exercise a clear opinion from the European Commission on what the position will be—not what the Government think, but what the Commission thinks. That is a major factor, and if the Government have got it wrong that could push up the price of a first-class letter to nearly 30p. We are entitled to an answer to that question.
I asked the Minister of State earlier about Sunday collections, but I did not receive a reassuring response. The Minister looked surprised that anyone should mention Sunday collections, and implied that no guarantee was

required. As a member of the Select Committee on Trade and Industry, I remind the Under-Secretary of State that we campaigned ceaselessly on that matter for several years. As hon. Members might expect, I pay tribute to Sir Robin Maxwell-Hyslop, who always proved himself a terrier in his dealings with the Post Office, and who succeeded in persuading it to reintroduce Sunday collections. Those have now proved extremely popular, and are much appreciated.
That is exactly the kind of business that Conservative Members have told us represents the declining unprofitable end of the mail business. It is all about letters and cards from grannies to granddaughters, and so forth. That is most important in terms of the Post Office's social obligation, but it is not profitable.

Mr. Paul Tyler: Is that not an example of precisely the kind of service about which all kinds of assurances about the quality of service after privatisation have been made to peripheral areas of the United Kingdom, such as the areas that my hon. Friend and I represent? Yet whether it concerns water, gas or electricity, as soon as privatisation is bedded down the operators say that it is too expensive to provide that service to the more peripheral and scattered areas and there is a reduction in quality of service. We pay more for less.

Mr. Bruce: I agree with my hon. Friend.
I am coming to the end of my speech, but I still have some important points to make. The Government say that there will be a licence, a regulator and guarantees of certain services, which they have identified as the most important guarantees—although I have mentioned some that they appear to have forgotten, and that I hope they will consider.
I do not suggest that the Government are insincere in saying that. I believe that they recognise the importance of those services and want to guarantee them. However, the problem is that once the Post Office has been put into the private sector and given its freedom—that is what the Government wish to do—the pressure of competition will inevitably mean that the management will say, "We are sorry, but to respond to competition we have to get rid of the loss-making services, which means closing some of the network, reducing daily deliveries and cutting out second deliveries"—those are important to business, but not necessarily profitable—"and we have to consider surcharging the outlying areas: we cannot guarantee next day delivery to the outer Hebrides unless people are prepared to pay a surcharge, or whatever."
That is how things developed in New Zealand. I do not suggest that what happened there has to happen here, but there is a real danger. Even with good will and serious intent, the Government could find that they have created something over which they have lost control, and brought about the commercial pressure that threatens the public service.
That brings me to my conclusion of principle. My party and I did not oppose in principle previous privatisations, such as those of gas and electricity. But we objected to the way in which the Government proposed to carry them out, and especially to their failure to introduce effective competition at the time of privatisation. In those cases we have been proved right. The gas industry has now had to introduce competition in a much more painful and unstructured way, and that will have to happen with the electricity companies, too. In the meantime, consumers


have lost out. The fact that electricity prices have fallen is not the point. Management have managed to divert a lot of funds to maintain high dividends. That has been good for investors, but according to the watchdog consumer protection body, consumers have lost out and electricity prices are at least 5 per cent. higher than they should be.
I shall not even mention water, which is already a big political embarrassment to the Government. We opposed gas and electricity privatisation not on principle but because of the competition aspect. However, we all agree that with the Post Office, competition is not the answer in relation to the core service: nobody is arguing for competition there. Everybody recognises that there must be a guaranteed monopoly—and there is a point of principle there. If there has to be a publicly guaranteed monopoly, that monopoly must be accountable to the public sector.
That is a fundamental principle, and one that even Conservative Members should accept. Why should the House vote money, provide support or give a licence to a body, yet not be able to provide proper accountability to the people who are elected to this place to control such matters, and to the people who sent us here? I do not want detailed intervention in the day-to-day management of the Post Office—I recognise its need for commercial freedom—but it is providing a public service and we are entitled to demand minimum standards. I believe that the Government accept that, but they do not seem to accept the fundamental principle on which it should be based.
We do not favour over-tight regulation of the public sector, but we recognise that the public service must be accountable within the public sector. As the hon. Member for Gainsborough and Horncastle said, there is no difficulty in introducing commercial realism and allowing competition to develop in areas in which it can and should do so while at the same time maintaining proper public accountability.
Outright privatisation would not achieve that. Commercial freedom would. Selling some of the shares—especially to members of the work force, and perhaps more widely—may be a good option, and would provide a commercial test of the way in which the Post Office was operating. We as a party are prepared to consider that, but selling the majority of the shares removes the public accountability test, and on that count the Government's proposals fail.

Mr. Douglas French: I am interested in the long-term safety and security of Post Office jobs. I have a large regional sorting office in Gloucester, as well as many small post offices. Hundreds of my constituents depend on the Post Office for their livelihood, and I want to make sure that the jobs on which they depend are safe not only now but for the future.
I start my contribution with Eastern avenue, Gloucester, where the major regional sorting office is located. When one visits that sorting office, as I have on a number of occasions, the most striking things that one observes are, first, the employees' tremendous pride in the service that they are providing—it is an excellent work force which wishes to provide a first-class service and succeeds in doing so—and, secondly, the considerable investment that is taking place there.
Particularly striking is the way in which new machinery, introduced for the better handling of letters, has, within two or three years, become out of date as a result of technological development. More mail is therefore being handled faster, and will continue to be handled faster, with a smaller work force as the technology of sorting equipment improves. The inevitable conclusion is that the improving technology of letter handling is likely, in the foreseeable future, substantially to reduce the job opportunities for sorters of mail and other manual operatives in sorting offices.
The first question that strikes me as being important, looking at the matter from the standpoint of local jobs, is whether anything can be done to prevent those otherwise certain job losses. Obviously, it is not possible to stop introducing new technological machinery. One cannot pretend that it has not been developed. However, it is possible to take steps to ensure that the volume of mail and the profit that it generates increases rather than falls.
Unfortunately, as several hon. Members have already said, the profitable part of Royal Mail is threatened in a number of respects. Several hon. Members have mentioned the Dutch post office. I am sorry that the hon. Member for Gordon (Mr. Bruce) has left the Chamber—[interruption.] I am pleased to see that the hon. Gentleman has come back at the right moment. I hope that he will forgive me if I update him on the position regarding the Dutch post office.
The Dutch post office, under the umbrella of KPN and embracing PTT Post and PTT Telecom, was partially privatised on 13 June. The hon. Gentleman may wish to know that that partial flotation proved extremely popular. It was three times oversubscribed with a strong demand from not only domestic but foreign investors. The KPN shares set a bourse record for volume with 35 million shares changing hands, more than half of which were sold to foreign institutions. About 20 per cent. were sold to buyers in Britain and 18 per cent. to buyers in the United States. That has left KPN in Holland embracing PTT Post as the third-largest quoted company on the Amsterdam bourse, preceded only by the Royal Dutch Shell group and Unilever. Not surprisingly, PTT issued a stamp to commemorate that important stage in its development.
I mention that because it demonstrates the tremendous confidence of not only the management of PTT but the public in Holland in the capacity of their post office to perform and serve not only the domestic market, but, most particularly, the international market in a way which makes it possible for it to lead the world in post office services.
Much reference has been made today to the sort of competition that Royal Mail potentially and actually faces from the Dutch post office. I shall give a few examples, because although it is all very well to talk of competition, we must understand what form that competition takes.
One of the most profitable sectors of Royal Mail business is bulk commercial business-to-business deliveries. The Dutch post office, with tremendous success, is bidding for bulk United Kingdom direct mail for destinations outside Holland and the United Kingdom. If it creams off business that would otherwise have gone through Royal Mail, Royal Mail and everyone who works for it is the loser because that business is lost to an alternative enterprise.
Secondly, the Dutch post office is bidding for bulk mail for destinations within the United Kingdom. There, it is important to appreciate the effect of the accounting conventions of the Universal Postal Union which militate


against the Post Office that is doing the delivery. The revenue that is collected for a postal item, or in this case millions of postal items, is split, four fifths going to the country of origin—not the poster but the post office handling it—and one fifth going to the country that effects the delivery. When that business is lost, Royal Mail is saddled with the bulk of the work, because there is far more work to be done in delivering to individual destinations than in collecting, for only a fifth of the revenue.

Mr. Malcolm Bruce: The hon. Gentleman has just made a useful contribution to the debate. For those who have not been party to it, it explains what the competition is and the urgency for a response. The House should be grateful to the hon. Gentleman for that. I have no doubt that if the Post Office is privatised the share offer will be popular and I agree that it needs to be able to respond to the competition. However, that does not remove the fundamental point of principle as to whether that can be done within the public sector. It is important to underline that, although the Dutch post office has been partially privatised, it still is in the public sector and the Government have majority ownership. That is what we are advocating.

Mr. French: I shall come later to whether one can have commercial freedom in the public sector. But if one speaks to senior managers of PTT they will say that they have taken only the first step in the direction of selling the majority of shares. At the moment only a minority of shares has been sold, but eventually it is expected that the majority of shares will be in public ownership.

Mr. McLoughlin: My hon. Friend is on to an important point. The hon. Member for Gordon (Mr. Bruce) referred to the privatisation of the Post Office, but my hon. Friend has usefully put it on the record that we are talking not just about the Dutch post office but its telecoms operation. That 30 per cent. flotation was a large one for that country.

Mr. French: I agree entirely with my hon. Friend.
Why is it that the Dutch post office can organise Itself to win the sort of business that I have described? First, it can quote commercial tariffs in a way that our Post Office cannot. All the special deals that come from Royal Mail are according to a pre-determined formula, as with Mailsort, where the price to be quoted is already fixed and the nature of the deal or the customer placing the business is not taken into account.
In contrast, the Dutch post office can come forward with specific tariffs for specific customers if it knows that it is in a competitive position and wants to win a particular piece of business. It can enter commercial alliances, as my hon. Friend the Member for Leeds, North-West (Dr. Hampson) mentioned. It can also embark on the provision of a combination of services, a point that my hon. Friend the Member for Leeds, North-West made clearly.
A typical example is the fulfilment of a total postal requirement: that is, the design and printing of a piece of direct mail; the enclosing of that item in an envelope or wrapper; the generation of the addresses to which it will go; and the sharply negotiated transportation from A to B by the best means possible and therefore at the most competitive price. We must take notice of the fact that the Dutch post office can enter into joint ventures and alliances to achieve such services. It can compete on all those fronts, but the Royal Mail is left to compete only on sorting and

delivery services. One can easily see that it will not be long before it is wiped off the postal market place for that type of business.
If there were a few more Opposition Members present, I would no doubt hear them argue that there is not much to worry about—foreign post offices do not have the right to deliver to United Kingdom addresses, which accounts for the bulk of Royal Mail business, because the Royal Mail retains its letter monopoly. That view, however, is misconceived. It presupposes that the sending of a letter or circular through the post is an irreplaceable and indispensable service and that it will always be needed. The same view was taken by stagecoach operators, who eventually found, to their cost, that they were wrong.
As a medium of communication of information, the written or printed piece of paper that is delivered from door to door faces strong challenges. Other hon. Members have referred to fact that the fax is creaming off some of the business, as is the telephone. British Telecom's recent advertisement campaign highlighted the amount of telephone time that one can buy for the price of a postage stamp. Such competition—one medium competing with another—will increase and the Royal Mail must be able to respond to it.
It does not stop with the fax or telephone. More sophisticated forms of communication such as electronic mail, airwaves, telematics, satellite communications and other forms of data transmission are potential competitors for the humble letter going through the post.

Mr. Cousins: I am following the hon. Gentleman's argument closely and I agree with it. The Post Office says that 13 per cent. of that vital commercial market is under its control. If the competition is that severe, what is the economic and commercial basis of the guarantees that the Post Office, if it becomes a fully private company, will have a uniform price and universal delivery?

Mr. French: Uniform price and universal delivery will be much more within the grasp of Royal Mail if the rest of its business is profitable. It will be more capable of delivering universality if it has commercial opportunities. The reality is the opposite of the arguments advanced by Labour Members today.
The trend is away from what many see as an archaic mode of communicating information whereby messages are transported from one side of the country to other, and from one side of the globe to the other, on pieces of paper. The Royal Mail's business is rooted in that function. Any long-term examination of its business position is bound to raise alarm bells as to where it will be, not in two years', but in 20 years' time, if action is not taken now.
The Post Office's only answer to those developments should be to achieve a position, first, whereby it can compete vigorously and effectively for its share of the postal market, whatever the size of that market will be; and, secondly, whereby it can stake its claim for a proper share of those businesses that will inexorably nibble away at its current core activity. It must stake its claim to alternative means of communication.
That means that a measure of commercial freedom is vital. I have listened to the speeches of Opposition Members and I waited patiently to hear which Opposition Member would spell out what he meant by commercial freedom in the public sector. The hon. Member for Livingston (Mr. Cook) did not say how that could be


achieved. He made only an assertion that it would be possible and that it could be done, but he did not tell us the means. The hon. Member for Vauxhall (Ms Hoey) said that the Post Office should be given more commercial freedom, but she did not explain how she proposed to do it.
My hon. Friend the Member for Macclesfield (Mr. Winterton) said that commercial freedom could be given without too many difficulties. Again, he did not tell us how he would achieve it. It was the same with the Liberal party spokesman, the hon. Member for Gordon (Mr. Bruce). He paid lip service to the desirability and possibility of commercial freedom without explaining how it could be achieved.
Commercial freedom in the public sector is, for all practical purposes, a contradiction in terms. It cannot be achieved in the public sector. To achieve proper commercial freedom, the Post Office must have the opportunity to take proper risks. If it is still tied in some way to the public sector, it will not be able to take those commercial risks without, at some stage, the taxpayer having to underwrite the risk. I defy any Opposition Member to explain how it would be possible for the buck, ultimately, not to stop with the taxpayer and with the Treasury.
Commercialisation in the public sector would not work. My hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh) was emphatic that it would be irresponsible for the Treasury, if the Post Office were still in the public sector, not to maintain the system of the external financing limit and to take the cream off the profit, which it has done for so many years, in the interests of the taxpayer. It would also be irresponsible for the Department of Trade and Industry not to take an interest in the investment decisions in which the Post Office engaged. The DTI, the Treasury and the Government have an interest in preserving the best interests of the taxpayer and they could not do so in those circumstances.

Mr. Cousins: In many ways, I consider the issue to be the heart of the argument. How does the hon. Gentleman respond to the example of British Nuclear Fuels plc, which operates as a wholly publicly owned company? How does he respond to the example of what are regarded as trading activities, which are regarded as contingent liabilities only for the public sector borrowing requirement and the public expenditure statements?

Mr. French: I accept that those examples are departures from the broad principle, but they are not departures of the same type. We are dealing with a commercial enterprise of massive proportions. They are far greater than those in the examples that the hon. Member gave. We are dealing with commercial risks of enormous size. If they were not well judged, they could incur enormous losses for the taxpayer. The principles of public financial management and the responsibility of the Treasury to ensure that undue risks are not taken by commercial enterprises where the taxpayer has to pick up the bill must be adhered to and they should be adhered to in this case.

Mr. Oliver Heald: Does my hon. Friend agree that, in terms of the scale of the business, British Gas offers a far better analogy? It has been able to

decrease its prices, to enter new world markets and, at the same time, to protect the taxpayer and customer through an extremely efficient regulator.

Mr. French: I entirely accept that; I shall deal with the question of the regulator in a moment.

Mr. Peter Hain: Will the hon. Gentleman give way?

Mr. French: No; other hon. Members wish to speak.
If the Government retained a majority shareholding, they would still ultimately be in control. Royal Mail borrowings would still be part of the public sector borrowing requirement. Even more important, the Government would have not only a right but a duty to interfere in any investment decisions that Royal Mail and the Post Office chose to make. That is a recipe for not giving the Post Office the commercial freedom that it needs.
The Post Office must be allowed to set its own financial targets, to make its own investment decisions and to raise capital in the market place when it considers it necessary for the development of its business. It is absurd that at present—even in the case of fairly trivial investment decisions—the Post Office must approach a Government Department and, understandably, wait for some time to secure a decision that may not always be the one that it wanted.
The Post Office should also be freed from the straitjacket of the external financing limit, and transferred to a normal corporation-tax system that will allow it to make a reasonable contribution to the Exchequer. It should not be hemmed in as it is now.

Mr. Clifton-Brown: Does my hon. Friend agree that an EFL of £230 million—nearly four times the size of the 1992 limit—is draining a successful Post Office of resources that it badly needs for reinvestment purposes? Is not the desirability of access to the capital markets one of the main arguments for disposing of a large shareholding?

Mr. French: I entirely agree. The EFL is far too high, and access to the capital markets will provide the Post Office with precisely the alternative facility that it needs.
The anxieties expressed by Opposition Members are reflected in the printed postcards that many hon. Members will have received from both Post Office employees and users of local post offices. Most of those anxieties could be fully dealt with by a regulator. Such a regulator could set the ground rules for a competitive framework, protect the social needs that have been correctly emphasised, protect user interests, enforce universality and the uniform tariff and deal with the scare identified by the hon. Member for Vauxhall (Ms Hoey)—the possible ending of the returned-letter service.

Mr. Peter Ainsworth: Would not consumers' interests be better looked after under a regulator than they are now?

Mr. French: Yes, they would. The Post Office Users National Council currently does a very good job, but, although it tries to look after the consumer, its powers are ultimately limited. A regulator could ensure that the well-intentioned policies of such organisations were implemented: the legislation would give him teeth.
The Opposition have whipped up a good deal of anxiety. It is important for the future of the Post Office that they understand the arguments, which they have not done


so far. As long as the current circumstances prevail, Royal Mail in particular is destined to lose business, and also to lose the opportunity to play its part in what could be an exciting expansion of the global market place.
The more far-sighted postal authorities see their opportunities to claim a slice of the new, larger cake. They perceive not only the possibilities for the domestic markets, but the possibility of co-operation between Post Offices in different countries to develop their businesses jointly. The chief executive of our Post Office has a very enlightened approach, but so have others.
Theo Jongsma, managing director of PTT Post International, said in London on 21 June:
I support the privatisation of postal companies worldwide.
He did not just want privatisation for Holland; he saw its merits generally. He continued:
The Dutch experience has been and will continue to be a success. I sincerely hope that other governments will give their postal companies the opportunity to develop as normal businesses, in a competitive environment.
The Dutch post office, however, is not alone. Also on 21 June and also in London, Dr. Klaus Zumwinkel, chief executive officer of PostDienst in Germany, said:
There is a clear international trend towards liberalisation, deregulation and privatisation. No country can avoid this trend. The plan to convert the 3 Deutsche Bundespost companies into stock corporations is the only correct and viable approach to take.
The same philosophy is embraced in Sweden. Since 1985, Sweden Post has been able to make free use of its profits and has had full power over its investment decisions. It is not yet a private company, but the pronouncements of its chief executive make it clear that it is destined to be one in the not too distant future.
I believe that the future of our postal services will involve the emergence of a few global postal operators with a command of both national and international opportunities, and a command of written and electronic information and goods such as we have not seen before. There will be vigorous competition, but the strong operators will do extremely well: it is therefore vital for Royal Mail to be there, among the leaders.
Let me return to the point at which I began. I have no doubt that the jobs of my local postal workers in the sorting office in Eastern avenue in Gloucester—and those in other sorting offices throughout the country, as well as in sub-post offices—will be safest if the opportunity for change is embraced, and Royal Mail becomes the world player that it should be. Jobs will be more secure, and employees will share in the growth of the business.

Ms Ann Coffey: Although it identifies three possible options for the future of Royal Mail and Parcelforce, the Green Paper on the future of postal services effectively dismisses two of them out of hand. The Government are clearly batting for only one, and will spend the next three months trying to sell it to the public—for they are well aware that the public do not favour any kind of privatisation of the Post Office, and are very concerned about the current proposals.
One of the options dismissed by the Government was 100 per cent. privatisation, although they were enthusiastic about it. Having heard a couple of Conservative speeches today, I can see that there is a good deal of support for it within the party; the Green Paper, however, commented:
many people prefer a closer link between Government and Royal Mail than this would provide".

In other words, the Government have recognised that the public will not tolerate 100 per cent. privatisation. Perhaps that is because the public are not so impressed with its consequences. The comments of my constituents about the privatisation of our existing public utilities are mainly about the size of the chairmen's salaries and the problems of job losses among ordinary employees.
The Government also dismiss out of hand the retention of the Post Office in the public sector, while giving it greater commercial freedom. In case somebody stands up to ask what I mean by that, I refer them to the Government's option, which makes several suggestions about how that may happen.
The Government have three principal arguments against that option: first, that, as a publicly owned company, the Post Office would be protected from failure. Most people in the country do not want to see the Post Office fail and that option would be positive rather than negative. Secondly, they say that it would be underwritten by taxpayers, but the Post Office has made a considerable profit for a number of years, which has been very beneficial to taxpayers in the country by helping to finance other public services such as health and education.
Thirdly, the Government say that, as a public company competing in the market, it would distort the market and would become a soft option for private finance. Surely the water, gas and electricity companies and British Telecom are effectively private monopolies. That is why they attract such a good level of investment, because large investors see them as low risk.
The option that the Government are trying to sell is that of retaining 49 per cent. of the shares in the Post Office, so that they would be a passive partner, while selling off 51 per cent. of the shares. I am sure that, if they did that, like the gas, electricity and water companies, it would also be seen as attractive to private finance.
Whether it would meet the Government's criteria for attracting private finance that it should be seen as a high-risk business is very doubtful, because I am sure that all private investors would be attracted if 49 per cent. of the Post Office is publicly underwritten by the Government. Therefore, as one of my hon. Friends said earlier, the notion that on the one hand there are privatised companies and on the other publicly owned companies, and that the finance attracted to each of them is different, is absolute nonsense.
One of the biggest selling points of the option that the Government have put forward is that the employees will have 10 per cent. of the shares. In fact, that is the only mention of the future of the employees in the whole Green Paper. The reality is that, in this country, private shareholders have diminished in the past 15 years of our share-owning democracy, and shares held by institutional investors, whose power is enormous, have increased as a percentage.
Companies' accountability to their individual shareholders is very small. If privatisation takes the proposed form, the accountability to those shareholders who are employees of the Post Office will be exactly the same as it is in other companies—a lot of shouting about it, but very little accountability. I cannot imagine the chairman of a future privatised Post Office ringing up to consult the local postman, who has a few hundred shares, about the commercial decisions about to be made, although I can imagine the chairman telephoning a large investor for consultation.
That is a very poor way in which to maintain the accountability of the Post Office to its employees. The Government may feel that that is a good selling point, but it is a sham, and it means very little. I am sure that many of the employees who will be offered 10 per cent. of the shares would willingly part with their shares to ensure that the Post Office remained in public ownership, because they feel that that would be the best way in which to ensure the protection of their jobs.
Privatisation will not protect employees from losing their jobs, nor will it increase their pay in real terms. We are talking about many employees—165,000 people are employed by the Post Office. One of the most powerful arguments for keeping the Post Office in public ownership is that, in the aftermath of privatisation, thousands of employees will lose their jobs—it may not happen the month after privatisation, or the month after that, but it will happen. Commercial pressure cannot consider job loss. The driving force is the demand of the market for short-term dividends, and that will be no different for a privatised post office.
The country cannot afford any more unemployment. We must consider ways in which to keep people employed, of employing more people and of not making people unemployed. If we do not, we will not have many customers or consumers left—people need money to consume—nor will we have money going into pension funds, or money to invest in industry; nor will we achieve the social order or the stability that we need.
The Government need to accept their wider responsibility to ensure that everyone has access to the wealth of the country through employment. To do that, they need to look at their role as a purchaser and their role as an owner of public companies and their role in every single Department.
The Government also need to consider the job implications of their policies, as well as the commercial interests about which we have heard a lot tonight. The question should always be how we can consider employment, how can we create employment, how we can keep people in employment, as well as how we can make a business more efficient and more competitive, and how we can give value for money to customers. All those questions should be asked before any policy change, and they need to be asked when considering the future of the postal service.
There is only one answer to the present proposals: to retain the Post Office in the public sector, give it more commercial freedom and ensure that it continues to be a successful public enterprise, employing 165,000 people and much valued by the British public. That is what the public want, and I am sure that they will express it locally over the next three months. The big question, is will the Government listen?

Mr. Geoffrey Clifton-Brown: A lot has been said in the debate, but may I first make it clear that, when my right hon. Friend the President of the Board of Trade made his announcement on 19 May, he said that three inviable functions would be kept in the Post Office organisation which would be laid down by statute? They are, first, maintenance of a nationwide

letter and parcel service with a daily delivery to every address in the UK; secondly, a uniform and affordable structure of prices; and, thirdly, perhaps most importantly, a nationwide network of post offices.
As I have already made clear in an intervention, 19,000 out of the network of 20,000 sub-post offices are owned by private individuals, involving their own capital. I pay tribute to them and assure them that I do not believe that any of the proposals which I have seen mentioned in the Green Paper would in any way threaten the viability of their sub-post offices. There are other factors at work which may well threaten that viability and I shall address those in a moment.
I also pay tribute to my hon. Friend the Member for Gloucester (Mr. French). In particular, he mentioned his sorting office in the city of Gloucester. I very much hope that the viability of that sorting office will be maintained exactly as it is at present, because it is from there that the majority of my constituents' letters come.
Over past years, I have visited sorting offices in my constituency in Cirencester and Tewkesbury early in the morning and I have seen the valuable work done by the Post Office delivery men in those sorting offices. They then go out in all the worst weather. I pay tribute to them for that work and also for their valuable services in often providing companionship, advice, messages and so on when visiting the doorstep.

Mr. Hain: If the hon. Gentleman is paying such a generous tribute to his postmen and women, why does not he listen to them? None of them wants the privatisation which the Government are thrusting down their throats.

Mr. Clifton-Brown: As I shall make clear to the hon. Gentleman in a minute, the best way to secure the maximum employment in the Post Office is to ensure that it is profitable. As I shall make clear, it is only by some radical alteration to the existing structure that it will remain profitable and, above all, retain its market share. It is losing market share at the moment and we must do something about that, whatever solution we come up with.

Ms Estelle Morris: If the hon. Gentleman is so concerned about the loss of market share and about the need for the Post Office to be allowed to be more competitive, does he think that the Government have assisted that process by dilly-dallying for two years on the result of their review of the Post Office? How did that delay help the Post Office to prepare for increased competition?

Mr. Clifton-Brown: This is probably the most fundamental reorganisation of the Post Office for the past 150 years—since Rowland Hill invented the penny black. In such a fundamental reorganisation, we want to ensure that we get it absolutely right. That is why we are having this debate today and that is why my right hon. Friend the President of the Board of Trade and my other right hon. Friends are considering carefully what is the best course for the employees of the Post Office, above all, and for the maintenance of the profitability of that business.
One has only to look at the Opposition motion to see precisely what the hon. Member for Birmingham, Yardley (Ms Morris) is alluding to. The Labour party is not prepared to consider the future. We must consider the future, otherwise we shall find that the Post Office's business slowly gets smaller and smaller. We should


contrast the motion with my right hon. Friends' amendment, which is positive; it suggests positive solutions and that is what I wish td address today.
We must recognise the changed environment in which we live. Customers no longer automatically go to the village shop. They may prefer to go instead to the large out-of-town superstore. When my constituents write to me saying that they are worried about the future of their rural sub-post office, my reply to them is, "If you are worried about its future viability, use it." It is up to the sub-post office in turn to provide the range of services that the customers want. I am delighted by some of my right hon. and hon. Friends' recent announcements about allowing a wider range of services to be sold in sub-post offices. I am particularly delighted by the announcement that a number of sub-post offices will be able to sell lottery tickets. That will considerably enhance their viability and profitability.
One must consider changing employment patterns. People now have less time to shop, so they increasingly look towards convenience shopping—towards electronic shopping—and that trend will continue. As consumers rapidly adopt the new technology, they will, if the sub-post offices do not provide that range of services, use them less. Apart from adapting to changing consumer patterns, the Post Office will need to adapt to changing trading conditions in three main ways. First, new forms of communication, such as fax and electronic mail, are increasingly emerging. The electronic data exchange market is growing by 20 per cent. annually. Television licences, for example, may now be paid for by direct debit. The fax market is growing by 30 per cent. The scope for expansion in that sector is huge and could wipe out much of the current letter business within a comparatively short time.
Secondly, competition from overseas post offices as the point of posting for bulk mail is increasing. As my hon. Friend the Member for Gloucester made clear, I have a company in my constituency with a large mail delivery which made a contract with the Dutch post office. It sent all its magazines to the Dutch post offices, which in turn contracted the magazines back to our own Post Office. The organisation making the profit was the Dutch post office and our own Royal Mail was left with the fag-end of the business. It had to make the daily deliveries and the charge for that was little above the cost price. We must respond to competition from overseas.
Thirdly, increasingly there is a trend towards contracting out and franchising ancillary services that the Royal Mail would be well placed to provide. Let us consider the competition. Let us consider the express deliveries around the country for bulk mail and parcels which are springing up all over the place. How can the Royal Mail respond to the challenges when it has to go to the Treasury every five minutes to ask for permission to invest in more facilities? In those circumstances, how could any commercial business succeed in the modern world?
As my hon. Friend the Member for Gloucester said, when the Dutch telecommunications business was privatised, one of the first things that it did was to make a joint venture deal with the huge American corporation AT and T to enable it to have access to the huge capital investment and the huge technology that would be required in that fast-changing business. As we shall see, the electronic mail business will change just as fast.

Mr. Gordon Prentice: Will the hon. Gentleman tell the House precisely when the Dutch post office was privatised?

Mr. Clifton-Brown: The first tranche of the Dutch post office privatisation took place in May.

Hon. Members: No.

Mr. Peter Ainsworth: It was 13 June this year.

Mr. Clifton-Brown: I have a little bit of extra knowledge from behind me. I am told that the exact answer is 13 June this year.

Mr. Prentice: Is it not the case that the Dutch Government kept 51 per cent. of the shares? Is that not, therefore, a perverse definition of privatisation? The Government hold the majority shareholding.

Mr. Clifton-Brown: I was coming to that very point. I will deal with it; it is important and I should like to illustrate it a little later.
One option is to give the Post Office much greater freedom to trade commercially while still remaining in the public sector. Many hon. Members, including the hon. Member for Livingston (Mr. Cook), have said that the Post Office would not succeed in the commercial world. Three options are proposed in the Green Paper. The first is some form of greater freedom in the public sector, whatever that means. No one has yet been able to tell us whether that would mean that the Post Office would not have to apply to the Treasury every five minutes and that it would be given increasing freedom to run its business. What about the external finance limit of £230 million? It has gone up four times since 1992. How would we deal with the increasing difficulty of the Post Office being in the public sector? I do not think that that is a realistic option.
The second option in the Green Paper is much more realistic. It is that 51 per cent. of the Post Office should be privatised. That would create a partnership between the private sector, the employees, above all, and the public sector. That seems a sensible way to go forward. In the other privatisations, City investors have been a little slow to realise the fundamental change in businesses that have been in the public sector for so long. It seems eminently sensible to let part of the business be sold off to the private sector and to prove that it can be run successfully in the private sector.
In response to the hon. Member for Pendle (Mr. Prentice), I say that I see no reason why, as in the case of British Telecom, we should not sell further tranches. As he knows, each time we had a privatisation of British Telecom—BT one, BT two and BT three—the share price increased because potential investors could see that the business had a tremendous future in the private sector and that it was becoming more successful.
The Government are eminently sensible not to go for the third option of a 100 per cent. sell-off in one go, although I must say that my personal preference would be to sell off the Post Office in one go and to let the Post Office management have complete commercial freedom. Why on earth should they not have that freedom, as has been mentioned by other speakers? As the Green Paper makes perfectly clear, the regulator's functions will be enshrined in statute. We are discovering in other previously privatised industries—water and electricity—how the regulator should function.
Opposition Members have spoken of the excess profits, as they put it, made by the water industry. If the industry did not make profits, it would not have the money for the £27 billion of investment over the next 10 years. Opposition Members do not seem to want an improved water system. My constituents want ever better water quality and they want money to be put into better water services. If those companies do not make a profit, where would the money come from? That is part of the problem about the Opposition's policy—[Interruption.] The answer is always the taxpayer.
What has happened to those businesses in the past? As we have heard, between 1976 and 1978, investment in the Post Office fell by a half and the same thing happened in the water industry and in the telecommunications industry. Why was it that up to the privatisation virtually every telephone box one went to was out of order and yet today 80 per cent. of them are in good working order and are clean? It is because British Telecom is making profits and investing them to provide an ever better service. There is no reason why the Post Office, minus the counter services, should not do exactly the same.
That is the way forward. We must also make sure that the regulator has all the statutory teeth that he needs. No doubt, night after night in Committee we will debate that very point. I want the regulator to have statutory teeth so that my constituents and those of Opposition Members, who have protested so much tonight, can enjoy the benefits to be gained from the Post Office providing a proper service, at a realistic price, across the country. That is best delivered by transferring the Post Office to the private sector, where it will make a profitable return. [Interruption.] The Opposition are obviously trying to make sure that I am truly put off my stride. They obviously do not like what I am saying.

Mr. Purchase: Is the hon. Gentleman in his stride?

Mr. Clifton-Brown: I will happily give way to the hon. Gentleman.

Mr. Purchase: We need some explanation of one small point that you made earlier. You said that the Government were sensible not to sell off the entire shooting match in one go, but, seconds later, you declared that that would be the best idea.

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. I am afraid that the Chair is unable to explain anything to the hon. Member for Wolverhampton, North-East (Mr. Purchase). He should refer to the hon. Member for Cirencester and Tewkesbury (Mr. Clifton-Brown), not to the Chair. He should not use the word "you".

Mr. Clifton-Brown: I am grateful for your little bit of protection, Mr. Deputy Speaker, but I was about to deal with the hon. Gentleman. He obviously was not listening to what I had to say, because, although my personal preference is for a 100 per cent. sell-off, I see the merits of a partial sell-off of between 49 and 51 per cent of the business. That would make a lot of sense from the taxpayer's point of view.
As I said earlier, the Government had considerable success in selling off tranches of BT and I am sure that the same thing will happen with the Post Office. From the

point of view of business development, however, the commercial freedom that an immediate 100 per cent. sell-off would give to the Post Office would be of considerable benefit to it. I hope that I have managed to explain that difference to the hon. Member for Wolverhampton, North-East. It takes a little understanding and I appreciate that he is a little bit slow to appreciate such matters.
The chief executive of the Post Office, Bill Cockburn, summed up the entire debate by saying:
I have had to say quite bluntly recently that, without commercial freedom, we face an increasingly bleak future. Loss of business to the competition, from overseas postal administrations and the use of new technology, could mean both significant job losses and post office closures.
That just about sums it up.
The Labour party's motion advocates doing nothing in the hope that everything will be all right. That simply is not an option. The Opposition are burying their heads in the sand, but the Conservative Government have proposed realistic options in the Green Paper. The options will be thoroughly discussed and considered by my right hon. Friend the Minister. I look forward to coming back to the House in the autumn to debate this matter and to progress to selling off 49 per cent. of the Post Office's business. I look forward to that business going from strength to strength in the private sector.

Ms Estelle Morris: Whatever our views about the future of the Post Office, hon. Members have a common starting point: there is universal agreement that the Post Office is a success story. Whether one considers the profits that it has made, its efficiency, its popularity or its social worth, the Post Office comes out with credit. No one has sought to advance any other view of the Post Office. We need to remember that all that has been achieved with a Post Office firmly rooted in the public sector.
The Post Office has already faced change. Anyone who goes around a sorting office will appreciate what it has had to do to mechanise. In recent years it has also restructured its work force. It has already adjusted to changing patterns of communications not only in this country but throughout Europe and the rest of the world.
At the very same time as the Post Office has coped with adjusting to meet all those changes, it has increased its profits, kept its prices down and helped, in no small measure, to pay off the Government debt. From all the evidence of what has happened in the Post Office so far, there must be a predisposition in favour of our leaving it in the public sector.
We are now told, however, that the Post Office faces a new threat of increased competition. Because of that, we are told that, for the first time in 150 years, the Post Office will no longer be able to cope with that competition unless it moves into the private sector. Despite all the adjustments that it has made, the mechanisation that it has introduced and the fact that the work force have adapted to new work practices, we are told that, because of that threat of competition, the Post Office can no longer cope in the public sector. Frankly, I do not believe that. I do not believe that that obstacle can be overcome only by a private company and I do not believe that giving the Post Office commercial freedom is the reason behind the privatisation proposal in the Green Paper.
Let us look at the Government's record in supporting the Post Office in the two years since the general election. If Ministers are so concerned that the, Post Office should be able to meet new challenges, why have they done so little to help? Why have the Government left Parcelforce dangling, uncertain of its future, for two years? Why have they taken just under two years to publish the results of the Post Office review? If the threat of competition was so great, why did the Government cut investment in the Post Office in last year's public sector round? Why did they double the external financing limit in a year and treble it in three years?
The Government have cut investment while arbitrarily increasing their take of the Post Office's profits. They also shelved a review because of political shenanigans in the Conservative party. Those are more the actions of a Government concerned with securing their own future than the actions of a Government concerned with securing the future of the Post Office. Given what the Government have done for the Post Office in the past two years, one must conclude that their motives on the future ownership of the Post Office cannot be trusted. They are based on a different agenda.
I do not believe that privatisation is necessary to give the Post Office the freedom which it wants and which the Opposition acknowledge that it needs. I acknowledge that privatisation could give it the freedom that it needs, but the Opposition believe that the cost entailed is not worth paying.
The Green Paper acknowledges that, for centuries, the Post Office has
made a vital contribution to our national life.
It also talks about the Post Office being a
unifying force of the nation.
That is what is at risk, unless the Post Office stays in the public sector. Can we really see the private sector companies, shareholders or boards agreeing to keep open 5,000 small sub-post offices that represent only 1 per cent. of the company's business? Can we imagine a resolution at the annual meeting of Royal Mail plc agreeing to keep prices 13 per cent. below the rate of inflation for a decade? That will not happen. That is not what motivates a private company. Such agreements will not be reached if the Post Office is removed from the public sector.
What we have in the Post Office is not repeated anywhere else in British industry: it is a special mix of public service ethos with a commercially successful track record. That combination must be addressed successfully in any review of the Post Office.
In the private sector, the pressure to increase dividends and top managers' salaries, as well as to cut out economically unviable parts of the business, will dominate. That is, by nature, the way in which shareholders and private sector companies work. Hon. Members have already mentioned what has happened in the water companies and the electricity boards. Tory Members may talk about guidelines which mean that the Post Office should not do that, but the Government cannot give a guarantee that goes beyond so many years, and they will be under pressure for the regulatory body to limit its restrictions on Post Office activities. The definition of a company operating in the private sector is that it has the freedom to cut out parts which are not economically viable. I do not believe that any statutory measures will stop the privatised Post Office doing that.
The Green Paper acknowledges that people are the Post Office's most important asset. Yet one of the main areas of anxiety and concern among Post Office staff—that of Post Office pensions—is dismissed in only three lines at the bottom of page 26 of the Green Paper. In those three lines, Post Office staff are assured that the Government will safeguard pension rights. That assurance might be welcome—indeed, I welcome it—but it does not go far enough and it is not sufficient to allay the justifiable fears of Post Office workers.
Post Office staff want to know what effect the envisaged changes in the Post Office structure will have on the now closed Post Office superannuation scheme and the Post Office pension scheme. Given assets of £10 billion and £435 million respectively and surpluses in both the closed and open schemes, Post Office employees want to know what access the board of a privatised Royal Mail will have to those funds. With Post Office employees paying 6 per cent. of their salaries in pension contributions, that is a question to which they are entitled to know the answer. Again, we wish to know how Postel, which has proved to be an effective investment arm for both the pension schemes, is likely to be affected by any changed structure in the Post Office.
There are 140,000 retired pensioners in the Post Office superannuation scheme and 120,000 still contributing to that scheme. Who will administer that closed pension fund in future if privatisation goes ahead? One of the major anxieties for everyone in the Post Office is whether the Government will give a pledge that the pensions for both current and new employees will continue to be index-linked under a privatised Royal Mail. The Government have not announced how the assets and surpluses of the Post Office superannuation scheme and the Post Office pension scheme will be divided between a privatised Royal Mail, Parcelforce and Post Office Counters.
Post Office workers have worked in an atmosphere of uncertainty for the past two years, and that is long enough. I invite the Government to give firm assurances on the specific questions that I have raised about the future of the Post Office pension schemes. I look forward to the Minister's response in that direction.
The Government will find themselves in a small minority when the results of the consultation exercise are made known at the end of September. The people have a stake in their Post Office. They have a right to be heard; more than that, they have a right to see their views reflected in any legislation that follows the consultation process. I believe that they, like us, will say that the future of their Post Office, which has served them well for more than 150 years, should be in the public sector, marrying the two ingredients of a successful and efficient public service and a profitable and popular commercial enterprise.

Mr. Peter Ainsworth: This is an important debate because we are discussing not only an aspect of national life with which all of us are familiar —I know that my constituents in East Surrey are familiar with the Post Office because they use it regularly to communicate with their Member of Parliament—but two important and successful British businesses: a communications business and a retail business. We are talking about how we in Parliament can best help them to succeed.
I agree with the hon. Member for Birmingham, Yardley (Ms Morris) that we start with much common ground. No one would deny that the Post Office has been successful in the past; it incorporates not only one of our greatest distribution businesses but one of the greatest distribution businesses in the world. It has not only consistently improved its service delivery over the years; it has managed to reduce prices in real terms and deliver a substantial stream of money—about £1 billion in real terms over the past 10 years—to the Treasury.
Equally, few people would deny that there are mounting and real pressures on the Post Office's ability to continue to succeed in the way that it has. For Royal Mail, the challenge comes principally, as we have heard, from the growth in telecommunications, faxes—which are growing at some 30 per cent. a year—and electronic data exchange. They all threaten the Royal Mail's largest and most profitable markets. My hon. Friend the Member for Gloucester (Mr. French) mentioned the current British Telecom advertising campaign. On my way here today, I drove past a poster which said:
Enjoy a 1st class conversation for less than a 2nd class stamp".
No further indication of competition is needed; that advertisement sums it up squarely. We are talking about a global communication market; we are not simply talking about the Post Office and Postman Pat, however important he may be.
If the Royal Mail is to maintain and improve its position within the communications industry, and if it is to participate in the activities that my hon. Friends have talked about, such as the international data highways of the future, it will require a substantial level of capital investment.
The Royal Mail has great advantages, as well as threats,, to face. It has a superb national delivery network; it has a reputation for excellence in service delivery; and it has a name that is recognised throughout the world.
For Post Office Counters, the challenge comes principally from a decline in its traditional markets, which has come about as a result of changing patterns of behaviour and the exercise of consumer choice. Ninety per cent. of Post Office Counters business is from as few as eight clients—and most significant among them is the Benefits Agency. We must consider the future of Post Office Counters in the light of the fact that, for example, 40 per cent. of new pensioners already have their benefit sent direct to their bank. We must also consider it in the light of the developing interest in direct debit and the fact—[Interruption.] There is that fly again. I do not know what the Official Report will make of that. Stamps are now widely available from outlets other than post offices. I think that the fly is trying to deliver a message to the Chamber.
The Post Office Counters market is undoubtedly facing a threat as well. But like Royal Mail, it, too, has advantages. For example, it has 20,000 outlets. I think that that makes it the largest retail network in Europe. It has unparalleled penetration not only in cities but in town centres and rural areas. It is our job to help to build on those strengths to make it a truly successful business for the long term.
I freely admit that these are not particularly original observations. The same observations have been made by

the Post Office, my right hon. Friend the Minister, my right hon. Friend the President of the Board of Trade, the Post Office National Users Council, the Mail Users Association, the Select Committee, the National Federation of Sub Postmasters and even the Opposition parties. All have observed the same trends, the same threats, the same challenges and the same opportunities, and all have been led to the same question: given that the status quo is not an option, how do we best enable the Post Office to build on its advantages and meet the challenges? Of course, this is where the differences begin in the Chamber.
The Government have clearly considered the matter with great care. They have listened to representations before publishing the Green Paper. They have listened to the Post Office management, who have stressed that in their view the Post Office needs the freedom to raise capital, to invest with confidence, to engage in joint ventures, to participate in international markets and to develop new markets and technologies.
Now the Government have produced their Green Paper, and with it a recommendation which—not just in my view but, far more important, the view of the Post Office—represents the best possible way forward. I believe that the Government's preferred choice will satisfy the Royal Mail's objectives, which I have outlined; in addition, it will have the benefit of enabling the work force and sub-postmasters to participate in the ownership of the company. Our preferred choice will build in greater consumer safeguards by way of regulation. It recognises the great public interest in the network of post offices, and it guarantees core functions in the service—daily delivery to all parts of the country and universal pricing.
The Green Paper is a consultative document; it invites an informed debate. Yet what is the response from Opposition Members? I fear that, taking their cue from the Union of Communication Workers and rooting their position in a blind attachment to state control, they merely offer a diatribe of scaremongering and a rather facile political polemic. They talk about job losses, post office closures and rising prices. They talk about failure—all this despite the evidence that they were wrong about BT, wrong about British Airways, wrong about gas and wrong about steel. Despite all that privatisation has achieved for taxpayers, businesses and consumers in the past decade, Opposition Members remain implacably ideologically opposed to it.
While the Union of Communication Workers rushes off to print two million leaflets and God knows how many stickers, the Labour party offers, in time honoured cliché, to
turn the summer heat on to the Government by taking our campaign into the rural shires who have most to lose from the privatisation of the Post Office".
I wish the Opposition much joy on their rural ride. They tend to get a little lost in the shires.
It is an inescapable fact that, just as enabling post offices to increase substantially the range of goods and services that they can offer is the most certain way to ensure their success, so privatisation offers the best way forward for protecting jobs in, and enabling the future success of, the Royal Mail.
Opposition Members need to understand, when launching the campaign to which the hon. Member for Vauxhall (Ms Hoey) referred, that it will be a campaign against the Post Office, against its workers and against its future prosperity. When they return from the rural shires,


accompanied by Sancho Panza in the shape of the Liberal Democrats, I have no doubt that they will continue to peddle the option about which we have heard so much today and which Opposition Members claim will achieve all that the Royal Mail wants and needs. In truth it will do nothing of the kind.
At least this time the Opposition parties have been able to face up to the problem, but unfortunately ideology has forced them to shy away from the solution. Curiously, there is one aspect of Opposition policy about which they have been rather reticent. We have not heard what that policy would be in the event of privatisation taking place. I invite the Opposition spokesman to confirm now that such is their commitment to the ideology of state control, so deeply embedded in the Opposition motion tonight, that they would not hesitate to renationalise the Post Office in the unlikely event of a Labour Government.

Mr. Cousins: The hon. Gentleman was presumably here at the beginning of the debate to hear my hon. Friend the Member for Livingston (Mr. Cook) make it clear that it would be our intention if we returned to power, and if by some mischance the option that the Government appeared to support had been implemented, to restore public ownership.

Mr. Ainsworth: I am grateful for that interesting reply. It differs markedly from my recollection of what the hon. Member for Livingston said. The Labour party appears to be divided, but it is encouraging to see that the clause 4 adherents in the Labour party are alive and well and sitting on the Front Bench. I have no doubt that the hon. Gentleman's answer will be noted with considerable interest outside the Chamber.
The nub of this debate concerns whether the Royal Mail can meet the challenges ahead while still in the public sector. The Opposition parties maintain that it can, but there are three obstacles to that. We have heard about them before, and I have yet to hear any convincing arguments that would remove those obstacles.

Mr. Clapham: Has the hon. Gentleman had a look at the Trade and Industry Select Committee report on the future of the Post Office, published in March of this year? If he has read through the notes of evidence, he will have seen that the management of the Post Office stated that they would be well suited with the option allowing commercialisation of the Post Office, so that they would be freed from the external financing limits and able to compete on a level playing ground with the post offices of Sweden, France and Germany, which are also state plcs.

Mr. Ainsworth: I am glad that the hon. Gentleman has referred to that report, which I read with considerable interest. He will have noticed, of course, that since publication of the Green Paper the Post Office management have made it abundantly clear that they do not favour remaining within state control, for the good reasons stated in the Green Paper itself.
As my hon. Friends the Members for Gloucester and for Leeds, North-West (Dr. Hampson) said, the Royal Mail's ability to invest in new technology and in the development of new markets has been and is being hindered by Treasury restraint. As long as the Royal Mail remains in the public sector it will effectively be forced to compete in the general public expenditure survey, a fact clearly reflected in the rising EFL at a time of public expenditure restraint and of

the application of the Treasury's blue pencil to the spending plans submitted by the management of the Post Office.
The Minister of State gave several examples of the sort of problems that arose for publicly controlled companies under the Labour Government, and my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) dwelt on the same subject. It is essentially a simple idea: as long as the Royal Mail is owned by the state, the state will have other spending priorities and the Royal Mail will suffer as a result.
I should like to quote from the Select Committee report, which states
the chief executive of the Post Office said that above all what was needed was that the Post Office should be free to raise money without it being in the PSBR and free to make investments without having to consult the Treasury every five minutes. We support those sentiments.
The hon. Member for Yardley may disagree, but it is frankly naive to think that those objectives can be met while the Royal Mail remains under state control.
Secondly, as we have discussed, competition with the private sector must operate fairly. I know that that is a difficult issue—the hon. Member for Gordon (Mr. Bruce) has said that it is by no means simple—but how can it possibly be fair to have a system whereby a publicly owned Post Office, backed by the taxpayer, competes with private companies for markets and capital? That simply is not fair.
The third problem with the Opposition's contention today is that although, as I think most people will agree, the future of Royal Mail lies in exciting new markets, if the company is to become a significant player in new markets for electronic information transfer, substantial capital investment will be required, and one is entitled to ask why the taxpayer should take risks on that capital investment which are rightly the business of shareholders and financial professionals.
The Green Paper says that, if the Post Office remains in the public sector, it may well be subject to slow decline, and we simply cannot afford to waste the opportunities that now exist. The Green Paper's preferred option makes clear a commitment to universal pricing and delivery; it reinforces the position of Post Office Counters; it enables the business to expand and develop new markets; it recognises the social dimension of the Post Office and its services. It commits the Government to substantial continued investment in two businesses, which would be newly freed to succeed.
The competitiveness White Paper published by my right hon. Friend the President of the Board of Trade a few weeks ago discusses how the Government can best help British businesses:
Often the Government can help most by getting out of the way.
That is the case here.
Opposition Members claim to speak for the Post Office. They do not. They speak for the old socialist belief in state control. We have heard that from the Opposition Front Bench this afternoon. They have learnt nothing; they would do it all again.
The Post Office, in any case, can speak for itself. It did so when the Green Paper was published. The headlines of the Post Office press release will suffice:
Partnership Option Best—' A Real Winner for Britain' Post Office Urges Public Support".
It is a matter for great sadness that the Post Office will


receive no support from the Opposition parties who cynically exploit the anxieties of the vulnerable for political gain at the expense of British business.

Mr. Ken Purchase: I have heard today a great deal of justified congratulation of the Post Office on the excellent way in which it runs its business and services—the public services that it has provided for 150 years.
I add to those congratulations by saying—no doubt hon. Members will want to join me in saying it—that during the summer we shall expect our huge bundles of mail to be delivered to our offices and homes, with ever heavier sacks of mail arriving on the shoulder of, in my case, the postwoman, and I greatly value the service that she provides. Hon. Members will receive the same quality of service, whether they represent a constituency in the far north of Scotland or the far south-west of England. That service is guaranteed: it will happen—we need not worry about it. [Interruption.] I am being prompted from the wings to say that that guaranteed service will also be provided in Wales; I am happy to add the Welsh contingent to my thanks and congratulations.
Some years ago, my wife was a postmistress. We ran a small post office in an inner-city area with predominantly 19th century housing built by brewers and other organisations. The population were elderly and relied on the post office for the services that they needed in terms of pensions and other bits and pieces. They valued the commercial side, which my wife ran: envelopes, writing pads, sweets and all the things that we generally now take for granted in a sub-post office, all of which help to make the whole business a viable proposition for someone to run.
Earlier, there was discussion about whether there was any cross-subsidy between one part of the Post Office and another. An accountant could probably demonstrate either case. However, it is obvious to me that the salary of a postmaster or postmistress in a sub-post office in a declining area—an office that is visited by fewer and fewer people, who nevertheless rely on it—could not be met from the volume of business that is transacted. None the less, at present that sub-post office is kept alive because the entire business is able to sustain it from its overall profitability. That is an important point which ought not to slip off the agenda too quickly.
Although there is a right and proper emphasis and a campaign about the problems of losing rural Post Office services, the needs of the inner cities are no less acute. I could go further and say that, due to the nature of inner-city communities, the density of the sub-post office network is vital to give people the peace of mind and confidence to know that they can walk relatively short distances, without needing to rely on any other form of transport, to obtain their pensions, their child allowances and everything else that is available at the Post Office.
Earlier we heard it said that if, as a result of competition, our sub-post offices were to lose 10 per cent. of their business, many of the sub-post offices would quickly slip into a loss-making position. If their profitability were the sole criterion for whether they should continue, many

sub-post offices would be closed in the areas that I have described and I am sure that the same would be true in the rural areas.
Where could that competition come from? Frankly, if we leave this successful organisation as it is, but accept the changing technology, changing needs and new developments, and allow the Post Office the freedom to deal with those in a proper way, with sound management and good financial policies, there is no problem with competition—not domestically, at least. A strong domestic position will better equip our Post Office to deal with the increasingly international side of its business. It is true today, as it always was, that a strong home market is vital to enable any industry or service to develop worldwide competitive strengths. One needs that base in one's own domain.
We are in danger of offering, to anyone who cares to come along, a proposition that they can set up a postal service. I know that it will be said that we shall have a minimum postal charge and therefore the opportunities will not arise, but they will. It will not be long before little local services develop, taking letters and delivering them. Very soon, it will become almost the norm to do it from one end of the place to the other, and soon the Government will be asking, "Is there much point in maintaining the artificial level that we have imposed? We might as well let it go."
Some of us have not forgotten the lesson of Sunday trading. It took the large national companies to break the law, disregard the law, pay no attention to the law, and be rewarded by the Government for having so done. I obviously excuse the Minister for Industry, who was in a different camp on that occasion. There is a possibility that this will develop in the same way because of the idea that it is impossible to control the popular demand that would arise for such a service. We should keep that in mind, especially in the light of our recent debate on Sunday trading and what happens to law breakers in that regard.
I do not necessarily say that it is impossible for private enterprise to run a network of sub-post offices and post offices—clearly, it is possible with full and proper regulation—but the Government's record is to reduce rather than introduce control of these matters. I am sure that they would let it slip as soon as pressure was brought to bear on them. If that is the case, why should we change a winning team? As I have said, the Post Office needs to take on board developments in this country and worldwide.
With regard to inner-city sub-post offices, the Green Paper refers to the new challenges mentioned by a number of hon. Members, but there are also some old needs in inner cities. On a downward slope when demand is decreasing, profit can still be made from providing a good service. Decreased demand does not mean that the service cannot be organised properly and profitably and make a contribution. To do that, one simply gathers up the available business and provides it at a proper price. That would protect the network of inner-city post offices.
There are old-fashioned needs, and old-fashioned common sense ought to dictate that great care needs to be exercised before accepting the Government's view of privatisation by selling 51 per cent. One Conservative Member said that his preference would be to get rid of the lot as quickly as possible, but he failed to explain the sense of the Government's desire to slice it up bit by bit. No doubt he was thinking of the next election and wondering how the Government might best sell off the Post Office, get


in some money and give it away as another tax handout. That is exactly what they are thinking, and much of what drives the White Paper could be understood by looking at it in that way. In the end, we come down to ideology.

Mr. Clifton-Brown: I am listening carefully to the hon. Gentleman. Is he suggesting that we have privatised about 27 businesses since 1979 merely to win four elections which we won so successfully? Those businesses now have a change of culture and operate successfully in the private sector.

Mr. Purchase: They have certainly had a change of culture. Of that there is no doubt: indeed, additional evidence arrived this very day on the front page of the Financial Times for all who cared to read it. The hon. Gentleman looks away because he cannot bear to hear the truth. The Financial Times states that the electricity companies, or rather their chief executives and main directors, have had a massive bonanza. It is simply a case of changing the culture so that public money can be used to line private pockets. That is the nature of the change of culture in what were public services.
Let us reflect on this great change in, for instance, British Telecom. I agree that, comparatively speaking, the telephone service is now cheaper, but by golly why should not it be? There have been worldwide advances in technology. Is the hon. Gentleman or any of his colleagues saying that those changes would not have happened—

Mr. Sainsbury: Yes.

Mr. Purchase: That is nonsensical. The fact that BT was owned by the state would not have pre vented worldwide technological advance from being taken on by any sensible company or any commercial undertaking. Our model of commercialisation fits well with the ability to take on new technology and for services to develop and improve and reach more people.
The Minister turned the truth on its head when he said that Labour believed that everything private is bad and everything public is good. Almost the whole of the Labour party has spent most of its working life in private industry and enterprise and we do not believe that at all. That whole concept is nonsense and the Government must adopt a more sensible approach. They cannot continue with the idiotic ideology as though it had not failed when it has manifestly done so.
People rightly believe that they are paying more for poorer quality water. The water companies may say that the chemical mix is correct, but we know that the water that comes out of the tap is abominable. As for investment, instead of going to their shareholders for money for long-term investment, which is then paid off by revenue, the private companies immediately impose a price rise on the general public who are absolutely held by those monopolies. That is how investment is financed, while at the same time the companies increase dividends well beyond what could normally be expected in any other commercial organisation.
We do not have a uniform view that this is good and that is bad. We have to look at what has happened. There has been some good and some bad in the industries that the Government have privatised. The Post Office is an excellent organisation which delivers a good service uniformly across our nation. It could compete internationally if the Government would give it the go-ahead on a

commercial basis. Why are the Government obsessed with the ideology that everything in the public sector is bad and everything in the private sector is good?
We heard talk about how the Treasury determines everything. For goodness sake, the Government are in charge of it: they can decide the rules and what constitutes part of the public sector borrowing requirement and what does not—or perhaps the Minister can do it by himself. If the Government continue to box themselves into a corner of their own making, they cannot plead to the House, "How can the Post Office possibly prosper when it has to run to the Treasury every time it wants to invest two bob?" That can be turned round if there is a desire to take that utility out of the PSBR and give it commercial freedom, including the ability to raise money on the capital markets.
I hear calls of, "Unfair," but unfair to whom? The Green Paper tells us that at present what happens with regard to external financing limits and the contribution is similar to what happens to the dividends paid to shareholders. This is our business, our Post Office. Why should we not have the dividend, invest capital and take a long view as a community, collectively? The Post Office is a prime service industry. It does not have to be privatised in this way. It can serve the needs of our nation domestically and industrially.

Mr. Peter Ainsworth: The hon. Gentleman referred to a point that I made, but I am not sure that he fully understood it. The point about fair competition is, first, that it is good and, secondly, that it cannot exist where one of the competitors has behind it the full weight of the taxpayer. There can be no fair competition on that basis.

Mr. Purchase: That turns everything on its head. Any number of international and multinational conglomerates have such clout in the money markets that it is silly to talk that way about Britain, which probably has a gross domestic product smaller than the borrowing ability of some multinationals. [Interruption.] I do not have it wrong. It is barmy to say that we should not exercise our right collectively and as a state to borrow money to finance long-term investment in our industrial and service sectors. It is not me who has not understood; your side—

Mr. Deputy Speaker (Mr. Michael Morris): Order. I am sorry to interrupt the hon. Gentleman when he is in full flow, but we do not normally use the words "you" and "your" in the Chamber.

Mr. Purchase: That is the second time I have been told that today, Mr. Deputy Speaker. I understand and I will do my best to refrain, notwithstanding the full flow.
It is right that collectively we should be able to raise money for long-term investment. It is Conservative Members who have not understood the important difference between borrowing for investment and borrowing to pay the dole. The Government are pouring money down a black hole with no chance of recovering it. They are financing unemployment, much of it the result of the so-called rationalisation of some of the former nationalised industries. That is why millions of people are claiming the dole instead of working.
We want the Post Office to be able to borrow for long-term ventures such as modernising, improving and spreading its service as widely as possible, thereby leading us to a springboard from which we can compete successfully on the international stage and win for Britain.

Mrs. Angela Browning: I have resisted the temptation to intervene in the speeches of Labour Members since the hon. Member for Vauxhall (Ms Hoey) so ungraciously refused to allow me to do so in her speech.
Some rather contradictory views have been expressed by Labour Members. They have said that, if Royal Mail is privatised, the price to the customer will be jacked up, but that private enterprise would undercut Royal Mail. The idea that any business would jack up its prices while competing with other companies that were reducing theirs does not sit well in the marketplace with which I am familiar.
The hon. Member for Wolverhampton, North-East (Mr. Purchase) disagreed with the Minister's assertion that, if British Telecom had remained in the public sector, it would not have reduced its prices or acknowledged advances in technology. The hon. Member for Birmingham, Yardley (Ms Morris) claimed that privatising Royal Mail would be bad because the only way to protect the 160,000 jobs involved was to keep it in the public sector. I am not sure whether the hon. Lady believes that British Telecom could have maintained its staffing strength while reducing its prices and acknowledging advances in technology—something that has been necessary throughout the world.
I represent a large rural constituency that covers some 650 square miles and has more than 70 post offices. I take a particular interest in, and have a particular concern for, the future of those post offices, the majority of which are sub-post offices. I have had regular meetings with the sub-postmasters in my constituency. Indeed, last September I invited them all to a meeting so that they could tell me how they saw the future and what they wanted for rural post offices in particular. I am pleased to say that 30 of them attended that meeting and I then fed back their views to my hon. Friends at the Department.
I must come to the defence of the Minister. Labour Members have accused him of dithering. We all want the process to be concluded because uncertainty is not a good thing, but my right hon. Friend has not been dithering. He has spent considerable time studying what happens in other countries—especially the Republic of Ireland, which uses the switch card to good effect in the payment of benefits. I was glad, therefore, to note in the Green Paper the Government's pledge of —130 million for the automation of benefit payments. If the system is similar to that in the Republic of Ireland, it will greatly benefit my rural post offices. When the sub-postmasters met me last September, they were anxious to point out that they wanted ways to generate income other than the opportunity to sell tangible goods.
Some of the sub-post offices in my constituency are very small and do not have the room to sell a large range of stationery, let alone stock the grocery items that are so often found in small post offices. Some of them are open only two or three half-days a week and are located in people's front rooms. Their ability to increase their income and the range of services that they offer to people in the villages is obviously extremely limited.
If small post offices were computerised and able to sell a range of additional services, the benefits would be most helpful. Ticketing and similar services that can easily be arranged through a computerised service would help them to broaden the range of services that they could offer. That would help people who live in rural communities.
I have read the Green Paper carefully and I shall discuss it at a meeting with sub-postmasters in my constituency before 30 September. Before I do so, however, I should like to ask my right hon. Friend some questions. There is some concern about the payment that sub-post offices receive from the Royal Mail. When my right hon. Friend replies to the debate, will he give an assurance that that payment will continue? It is an important part of their income.
As is made clear in the Green Paper, and as Ministers have said from the Dispatch Box and elsewhere, it is important to maintain the network of sub-post offices and the universal daily delivery of mail from Monday to Saturday, regardless of where people live. In rural areas, people often live at the end of lanes, so it is important to maintain the continuity of the daily post.
Had the hon. Member for Vauxhall allowed me to intervene when she was talking about a second delivery, I would have told her that rural areas have not had one for many years. I visited the modern sorting office in Exeter, which is in the constituency of my hon. Friend the Member for Exeter (Sir J. Hannam), but which also serves my rural constituency that surrounds Exeter. I was there during the late morning and early afternoon and I saw the amount of mail that was cleared. It is quite clear that Royal Mail is now able to deliver, in one delivery, the vast bulk of the mail that it receives in a 24-hour period. Raising problems about a second delivery is just a red herring. Rural areas get their post on time without the benefit of a second delivery. Indeed, in this day and age, a second delivery is a bit of a luxury, especially in view of the small amount of post waiting to be cleared in the sorting office in the late afternoon.

Mr. Hain: Will the hon. Lady give way?

Mrs. Browning: I would be tempted to do so, but the hon. Gentleman's colleagues did not extend that courtesy to me earlier.
The cross-subsidy is important for the network of sub-post offices and sub-postmasters in my constituency want some reassurance about that. As I have said, many of them have very small businesses and the amount of income they can generate, from Royal Mail and other sources, is limited.
I am convinced that the necessary guarantees will be provided, so I shall be happy to support the proposed Bill when it comes before the House. Obviously, I want to take the opportunity to respond in detail to the Green Paper and to sound out my sub-postmasters. The principle behind the Government's proposal—which is to maintain the network of sub-post offices in its present format but to increase the range of services that can be offered—is most welcome. My hon. Friends have demonstrated amply that, if Royal Mail is privatised as is suggested in the Green Paper, it has not only to defend its position in the marketplace, but to be given the opportunity to go out and compete in marketplaces around the world.
We have heard what happens in the commercial environment, particularly with direct bulk mail. I know of businesses in other parts of the world—America, for example—that send an enormous amount of direct mail into mainland Europe. They rarely use Royal Mail because other countries' services can undercut us yet, as we have heard tonight, the local postman and postmistress ends up


putting it through a letter box or delivering it to a business. We are being used in a way which produces very little profit.
I received a letter from the Post Office—as I am sure did many hon. Members—outlining its concern at the way in which the volume of mail is growing. As a result of the growth in bulk mail, person-to-person mail is declining as a proportion of the gross mail handled by the Post Office. That is extremely worrying and, as we all know, once a business loses its market share and people build in brand loyalty with other service providers, it is difficult to break into those markets.
Royal Mail must be allowed to compete domestically and internationally. Associations that it may want to develop with printing companies and others who can deliver the complete package of services that people who send commercial mail want to purchase are important because that added value element will be extremely important.
In principle, I am happy to support the proposals that Ministers have outlined from the Dispatch Box. I obviously seek reassurance on the critical issues that affect people in rural areas, particularly in my constituency. I look forward to debating them fully and I hope that Ministers will take full account of the representations made to them in response to the Green Paper.
We have heard that, this summer, Labour party representatives plan to come into our rural areas. I hope that they wear good strong boots, as it is not as balmy an environment as they would wish. When they spread their scare stories in rural areas they will find people to be quite sensible. They will also find that the Liberal Democrats got there first as, for many months, the Liberal Democrats have been telling people in rural areas, by means of questionnaires and petitions, that they will lose their daily Royal Mail and the sub-post offices in their villages. I assume that the Labour party will follow them in that. They are past masters of such scare stories and I am sure that they will share their disgraceful tactics.
I hope that people will look at the facts and will not be gulled. The people who are gulled by scare stories are pensioners and disabled people who claim their benefits from local post offices and people who look forward to personal letters from relatives once a week or once a month.
The campaign is typical of what one might expect from Opposition parties, but I hope that it will be exposed for what it is—preying on the vulnerable and not a rational response.

Mr. Michael Connarty: Will the hon. Lady give way?

Mrs. Browning: I am not giving way to any Opposition Members.
I sincerely hope that the British public, who will be the prey of the summer campaign, will demonstrate, as they have in the past, that the privatisations that the Government have introduced have not only been right, but have been in the public interest.

Mr. Peter Hain: The most striking thing about the Green Paper is that it is riddled with contradictions. The Government have stumbled into the proposal like a drunken sailor intoxicated by the privatisation dogma.
Three years ago, we had the citizens charter, with its proposals for deregulation and extra competition. We heard no more about that. Then, two years ago, the President of the Board of Trade announced the privatisation of Parcelforce in an almost instant fashion, without proper consultation, only to be dragged by his officials into considering an overall Post Office review a week later, once it had been pointed out to him that it was not as simple as he had thought. We have had deliberations on the proposals for two years and now the Government have come up with this hotch-potch.
I remind the Government that the well-worn procedure for dealing with drunken sailors is to throw them overboard. The former Under-Secretary of State, the hon. Member for Gainsborough and Horncastle (Mr. Leigh), lost his job as a result of the mania for Post Office privatisation, so which Minister will be next? I believe that, ultimately, the people will throw the Government overboard as a result of this privatisation. I mean no ill will towards you, Mr. Deputy Speaker, when I say that.
The first serious fault line in the Green Paper is the separation of Post Office Counters from the rest of the Post Office. No postal authority in the world operates a separate retail business, as the Government are proposing. Even the Dutch, who have been quoted every other minute by Government supporters in the debate, have made it clear that they oppose such a proposition.
At a conference in London on 21 and 22 June the managing director of the Dutch post office, Mr. Theo Jangsmon, said:
I believe the separation of Counters from Royal Mail will hamper some service development".
The chairman of the Post Office, the chief executive and the rest of the Post Office management whom the Government are praying in aid to support the privatisation proposals have argued strongly in evidence to the Select Committee on Trade and Industry and elsewhere for the business to be kept together.
The former chairman of the Post Office, Sir Ron Dearing, who has been significantly silent on the privatisation debate because one might surmise that he is opposed to it, argued the same thing—that the Post Office should be kept together—in a letter to staff in January 1987, as did the Post Office Users' National Council in a submission to the Government's own review.
Are they all wrong? Do the Government consider themselves the only party to the debate who are right? I do not think so; it is essential to keep all sections of the Post Office together, because there is a synergy between the different businesses.
There are 3,092 delivery offices and more than half—1690—are attached to local post offices. If those post offices are threatened, the delivery offices will be threatened as well. Equally, if the delivery offices are threatened with closure, as will increasingly happen under privatisation, the viability of local or sub-post offices will also be threatened.
Parcelforce is another example. When there is nobody at home, parcels are invariably returned not to the 137 parcel delivery offices—a small number, which is declining—but to one of two other places: either the 3,000 local letters delivery offices or the 20,000 local post offices. If Counters is separated from Parcelforce and the Royal Mail as an entirely separate institution in the public sector, there is no prospect of that synergy remaining, and that will threaten the Royal Mail and Counters.
There is also a tremendous danger of Counters being left as a rump service in the public sector, with no obligations and no commitments from its sister businesses dealing with letters or parcels to support it in any way. I am not suggesting that there is an overt accounting cross-subsidy; there clearly is not, but there is an organisational cross-subsidy that results from being part of the same post office.
If, in addition, as the Green Paper proposes, private parcels operators and postal operators are encouraged to use the Post Office network as suggested in the Green Paper, there will be even less incentive for the privatised Royal Mail to continue to support the public post offices in the way it does at the moment.
I speak only for myself in this regard and may be criticised by members of my Front Bench, but if the Government privatise the Post Office—something to which I am 100 per cent. opposed—they should keep the counter business with the Royal Mail. If they are hell-bent on privatisation, they should privatise the whole Post Office, and not break it up in the way proposed. If there is an end to any obligation on the part of Royal Mail and Parcelforce to maintain current inter-business charging arrangements, the Post Office's overall viability, and particularly that of the counters business, would be threatened.
At present, there is a considerable financial flow between different postal organisations. At the end of March 1994, counters recorded an income from the Royal Mail of £221 million, against expenditure of £51 million; and from Parcelforce, an income of £22 million against expenditure of £1 million—a net income of £191 million from both businesses.
If Royal Mail and Parcelforce choose other means of delivering the services for which they currently depend on Post Office Counters, the effect on its small profit margin will be catastrophic. The Government have completely ignored that. In that event, the counters business would become a cost to the taxpayer, whereas at present it contributes to the Exchequer.
Crown offices are being downgraded or closed and replaced by franchised agents, so the Post Office's identity is being undermined. What obligation is there on Royal Mail or Parcelforce to use a local post office if it is at the back of—dare I say ?—a Sainsbury supermarket, newsagent or some other retail outlet?
Royal Mail will seek to maximise its market share as a private corporation. It will be under no obligation to the counters operation. Royal Mail and Parcelforce may even regard outlets stuck at the back of a Martins newsagent or Tesco as conflicting with their corporate image. That is another reason why a privatised Post Office may not want to use counters as a separate public sector operation.
After privatisation, we saw British Telecom take away services previously provided by counter outlets, such as the booking of international telephone calls. BT is currently presenting a proposal to cease contracting the sale of licence saving stamps. That is what happens when a unified business is broken up. I could quote many other examples. I am emphasising the case for the essential synergy between the different sections of the Post Office as currently structured.

Mr. Roger Evans: The hon. Gentleman argues that all Post Office business should be preserved in one unit for the benefit of the Post Office and of all the people who work for it. Is that view held by the Union of Communication Workers, by which the hon. Gentleman is sponsored?

Mr. Hain: The hon. Gentleman will have to consult the UCW. I dare say that lots of postmen and postwomen will be knocking on the door of the hon. Gentleman's surgery, lobbying him to change his views. There is united opposition among Post Office staff to this privatisation. I make the case not solely on behalf of Post Office workers but primarily on behalf of the public. The counters business will suffer irreparable damage by being hived off and left as a rump service in the public sector.
There is already tremendous public concern about the diminishing number of rural post offices, which are closing at the rate of 200 a year. A privatised Royal Mail and Parcelforce will be under no obligation to maintain local letter delivery offices on the present scale. As they seek to cut costs, they will reduce the number of those offices. That is already happening, but closures will accelerate, which will undermine the viability of local post offices. They are already on death row. In the coming year, they will desperately hope that they can be reprieved through the defeat of privatisation.
Paragraph 5 on page 27 of the Green Paper states that value added tax will be applied to "non-obligatory services". Does that mean that Datapost, which is Parcelforce's express delivery service, will attract VAT? Perhaps the Minister will respond now or at the end of the debate. Datapost users want to know whether they will be charged an extra 17.5 per cent. The viability of that service, which faces stiff competition from private carriers, will be threatened by the application of VAT.
Paragraph 4 on page 27 suggests that VAT will be applied to contract parcels. The Government say that VAT will not be applied to stamps. Mention has been made of so-called granny parcels. I have never understood why it is thought that grandads never send parcels. I refer to parcels of the kind that you, Mr. Deputy Speaker, and I might send to elderly relatives.
The Government have made it clear that such parcels will not attract VAT, but there are many grey areas and contradictions in the separation. I understand why the Government sought to separate stamps from contract parcels. It would be deeply unpopular if the public suddenly had to bear VAT to the tune of nearly one fifth on current prices.
Will metered post and other pre-paid arrangements attract VAT? We deserve an answer from the Minister, but he is not responding. It appears that there is some confusion. There will be considerable scope for evasion and loopholes in the clearly defined sectors of contract parcels and stamps.
Small businesses, for example, do not have a contract in the sense referred to in the Green Paper, but are subject to regular collections by Parcelforce. It suits Parcelforce to collect rather than to have parcels taken to local post offices or delivery offices. There is no pre-payment but subsequent billing. Will VAT be applied in those cases? That is important to small businesses, which are already facing enormous pressures as a consequence of the Government's mistaken policies. They will want to lobby the Government.
There is a suggestion that VAT will be applied to other sectors, but the Green Paper makes no reference to them. Will that tax be applied to Quadrant, the Post Office's catering operation; to Subscription Services, another Post Office business; or to Cashco, which is the Post Office operation that transports money to post offices and between Royal Mail and Parcelforce—a multi-million-pound, if not multi-billion-pound, operation? Clearly, applying VAT to those cash movements will be an enormous issue, which the Government will have to tackle.
There are equally important technical issues, and they are skated over in the Green Paper. What about the royal parks? At present, Royal Mail and Parcelforce vehicles have access to the royal parks, not merely to deliver to them and collect from within them but also, by custom and practice, to drive through them, whereas other private operators have not. Indeed, other operators are specifically barred from driving through the royal parks.
If there is to be a level playing field with DHL, TNT and the other private operators, will Royal Mail and Parcelforce vans lose those privileges, or will they maintain them? We have a right to know the answer to that question, but it is another black hole in the Green Paper.
To pursue the colour analogy, there is also the question of yellow lines. At present, Post Office vehicles can park on double yellow lines without being given an immediate fine and attracting the wrath of local parking wardens, as would happen to you or me, Mr. Deputy Speaker. As private operators—that is what the Government propose—will Royal Mail and Parcelforce vehicles cease to have the privilege of being able to park without hindrance on double yellow lines?
We should know that, as it will affect the viability of the privatised Post Office and Royal Mail that the Government are so keen on. Will they still be viable without those privileges? We should also know whether the private operators with which they will compete will have such privileges accorded to them, too.
The most serious problem of all—the Government have not addressed it, and it has not been mentioned in the debate so far, except in the opening speech by my hon. Friend the Member for Livingston (Mr. Cook)—is the wider pattern of competition that it is threatened will be superimposed on the Post Office.
If this were simply a question of privatisation, there would be enough of a threat for us to avoid going down that road, especially for rural services, which are presently subsidised within the Royal Mail sector by nearly £300 million. A lean and hungry privatised Royal Mail could not possibly do anything other than reduce rural services. Under any privatisation regime, there would be enough of a threat to rural services, but when the extra competitive measures buried in the Green Paper are put on top of those, there is a serious threat to the viability of the standards to which we have become accustomed.
There is enough of a threat to second deliveries even now. The hon. Member for Tiverton (Mrs. Browning) did not allow me to intervene in her speech, but her constituents, especially those who are Post Office workers, should be told that she does not appear to favour second deliveries in town areas. Paragraph 9, on page 21 of the Green Paper, says:
Nearly one area in six receives no second delivery".
That is a revealing statement. In other words, five in every six areas do receive a second delivery; 85 per cent. of all households receive one. But the Government are not

terribly keen on second deliveries. Their defensive explanation, saying that one area in six does not receive the second delivery, is almost a nod and wink towards getting rid of it.
Indeed, as I know from personal experience, having worked for the Union of Communication Workers and negotiated with Post Office managers, Post Office managers have consistently tried to get rid of the second delivery for years. Now the Government are effectively giving them the green light to do so. Not only will the public suffer greatly, but 27,000 jobs will be lost as a result.
That will be one consequence of privatisation. On top of that, there will be competition. It is important that the House understands what is at stake. The three separate operations within Royal Mail are processing, distribution and delivery. The Green Paper rules out competition in delivery. Why? Is that some charitable gesture? Have the Government had an attack of conscience for a change? No; the cost of delivery is the real cost of the Royal Mail. It costs four times as much as the other two functions. In other words, 80 per cent. of all the costs of the Royal Mail fall within the delivery sphere. So no competition is being opened up there.
Surprise, surprise—competition is being opened up in the profitable areas, in distribution and in processing. There will be competition, for example, in downstream access, which will allow private operators to come in and cream off the trunking—the easy work, on which a great deal of money can be made. It is said that competition will also be allowed in consolidation, which is mentioned in the Green Paper.
That will allow small companies, which cannot now become involved in mailsort and the other pre-sorting arrangements operated by the Royal Mail, to consolidate their activities together through a new private operator. The profits can then be creamed off, then be trunked down, and the rest will be dumped back into the Royal Mail delivery network. All the costs will be picked up by the privatised Post Office, while the private operators pick up the profitable traffic.
Another vignette from the Green Paper is the encouragement of niche licences, which will allow document exchange operators, such as Britdoc, to cream off more traffic, making a great deal of money in doing so. In addition, the monopoly is to be reduced below £1, allowing extra competition. If we add to privatisation, plus all those competitive measures, the RPI minus X price-cutting formula and the European Commission's proposals to take direct mail—40 per cent. of all Royal Mail's traffic—out of the reserved sector, a cumulative pressure will build up that will mean disaster for the Post Office in its privatised state. I believe that it will threaten the viability of the entire Royal Mail service, and place a serious question mark over its flotation. Potential buyers of Royal Mail should study that idea carefully, because they may be being sold a pup.
I believe that the alternative to privatisation has been clearly set out by my hon. Friends on the Front Bench. It is commercial freedom within the public sector. That is perfectly viable, and it exists all over the rest of the world. Even within Britain, it exists, and has existed, in such institutions as the BBC, BNFL, BP when it was still 70 per cent. publicly owned, and even in British Leyland.
There is no reason why commercial freedom within the public sector cannot be delivered, except privatisation


dogma. It is that dogma in the proposals that we started off fighting, and we shall take that fight to the country. I believe that the Government can, be defeated on this measure.

Mr. Andrew Welsh: In his attack on the fault lines in the Green Paper, the hon. Member for Neath (Mr. Hain) got to the root of the problem. His warnings were well made. The hon. Member for Tiverton (Mrs. Browning) wanted to see the continuation of rural and suburban post offices. I certainly share her wish for such post offices to continue to grow and thrive, and I hope that the specific reassurances that she sought will be forthcoming from the Government.
Post offices are a crucial part of the local economy of every community throughout the length and breadth of the country. I give due praise and thanks to the men and women who daily provide us with that invaluable service. In my view, we should keep that piece of family silver, polish it up and use it for the benefit of the community, not sell it off at the first opportunity.
I shall be brief, because other hon. Members wish to speak, but I wish to add my support for the Post Office as a public service for the public good. The Victorians introduced that concept which is still supported by the majority of people in Britain. According to recent opinion polls, opposition to privatisation has risen from 64 per cent. to 81 per cent. in the two years since the Government first mooted their ideas. Even 53 per cent. of Conservative supporters are opposed to privatisation.
The reasons for change are Government driven. Treasury rules come from the Government. Access to cash for technological improvements is also controlled by the Government. As with water privatisation, there is a self-fulfiling prophesy. The Government create the rules and then pray them in aid when they want to force through their own dogma.
The Post Office is already efficient, effective and respected. Scotland's 13,000 Royal Mail staff ensure that 94.5 per cent. of first class letters are delivered next day. Given our geographical reality, that is good by any standards.
Under the existing system, the Post Office is a profitable organisation with pre-tax profits of £283 million in 1992–93 and probably even higher profits in 1993–94. The Treasury has not hesitated to dip into that treasure trove to the tune of £230 million in the year to March 1993. But that self-same Treasury also imposes cash limits, thus thwarting potential investment.
There are obvious threats to the commercial future of the Royal Mail—for example, electronic communications. Faxes equivalent to 15 million letters per day were transmitted last year, and electronic trading by computer has doubled in volume during the past year. But those challenges could be met if the Royal Mail had the freedom to do so. Its investment record, despite current Government straitjackets, is good. Greater efficiency, reorganisation, which has dramatically reduced the layers of management, and the adoption of the total quality concept have already

happened within Scotland's Post Office service. So too has investment, as the new £30 million automated processing centre using the latest technology has shown, and another is to follow.
The Post Office has moved with the times and, if given proper support, will continue to do so. Freed from tough Treasury restraints, the Post Office could do much more. Financial freedom certainly seems justified. Last year, the Treasury allowed the Post Office to invest only three quarters of what it wanted to invest. That may seem bizarre for a consistently profitable organisation that has no debt and has amassed £500 million in cash. But in the curious world of the Treasury, any investment is undesirable since it contributes to the United Kingdom's budget deficit. Meanwhile, the annual dividend, which the Treasury extracts from the Post Office, currently £181 million, or virtually the whole of its net profit, is by private sector reckoning imprudently high.
Whatever guarantees are given, privatisation is bound to raise doubts and fears about the long-term future of post offices in rural areas and about the future of shops that are also sub-post offices. Those are genuine fears that the Government must address. Whatever commitment the Government make, a market-driven service will naturally pull in the opposite direction from the principle of uniform and standard delivery. It will cause uncertainties in the remote parts of Scotland and throughout the country.
It is not as if the Post Office were inefficient or out of date. It is consistently profitable, has restructured and streamlined its management, has invested in automated equipment and already operates across the boundary of the public and private sector.
I agree with the words of The Herald when it says that the role of the Post Office
is changing and will continue to change as more and more people open bank accounts. It needs the freedom to expand and develop but the public interest will be better served if this happens within the public sector—as the public clearly wants.
Everything that I heard the Minister say earlier points to the fact that he has clearly made up his mind about what he will do. Is the consultation paper yet another consultation sham from the Government? Will they listen to everyone and then do what they wanted to do from the beginning? The only commitment that we had from the Minister was that he would listen to what was said to him. We in Scotland know to our cost that when the Government consult the public they do not listen. In Strathclyde, 97 per cent. of the people showed that they did not want any change in their water services, yet that was what was done. Is the Green Paper yet another consultation sham from a Government who simply do not listen to the people but most certainly do listen to their own dogma?
I am concerned about the Scottish rural areas and the suburban post offices. This privatisation is most certainly a privatisation too far. Certain activities and organisations should be run as a public service for the public good, and this most certainly is one of them.

Several hon. Members: rose—

Mr. Deputy Speaker: Order. We have nearly 20 minutes before the wind-up speeches and three hon. Members wish to catch my eye.

Mr. Michael Connarty: I shall try to be brief.
Unfortunately, I was unable to be present for some of the earlier speeches and, sadly, I missed the maiden speech of my hon. Friend the Member for Dagenham (Ms Church), whom I knew as the health and safety representative at a national level for the Manufacturing, Science and Finance Union. I know that I will have missed an excellent contribution, one of many that will be made, and I shall read it with interest tomorrow. However, I have heard some of the contributions to today's debate and the detail into which some hon. Members have gone and I shall not go over that ground.
The question that sticks in my mind when I think of the privatisation of the Post Office, which was opposed even by Lady Thatcher as a privatisation too far, is why the Government are going ahead with it. It makes no sense. It was described by Mr. Bill Cockburn as a cash cow for the Government. It has been milked vigorously by the Treasury in the past few years—£65 million last year and £160 million have been demanded from its profits. It is a profitable organisation working well in the public interest.
Clearly the Government are still driven by an anti-public or anti-community activity ethos. They do not like things that are done by the people and for the people by organsiations owned by the people. That does not gel with their idea of how the world should be run. This is one step in which not many of their supporters will follow them.
The hon. Member for Angus, East (Mr. Welsh) talked about the 60 per cent. of Conservatives who did not support this privatisation. That means that of the 900 people who voted for the Conservatives in Monklands, about 580 would not support it. When one gets that far down, one should stop digging. The Government should stop and look before they pursue the action that they obviously want to take, as far as the public will allow—the privatisation of the Post Office. I hope that some Conservative Members will have the good sense to prevent them from doing that. Not that it would hurt me; it would damage the Conservatives more. When they leave office, I want it to be as a result of a resounding failure. However, it will be in the interests of the public if we stop this crazy idea.
I have read some of the economics of Hayek, the great guru pushed in the Conservative party among those in the No Turning Back group—the hon. Member for Stirling (Mr. Forsyth) and others, some of whom are no longer with us because they were found out at the last election. He claimed that everything should be run according to a market model. In those days he went so far as to talk about having private prisons, and people laughed. According to the Hayek theory, one should even have private armies. That would be just one more step all the way for the Government. People laughed at the idea of private companies taking criminals to court and to prison, but that was the economic theory of Hayek and the lunatics of the ultra-right. The Government still support people who adhere to those crazy theories.
Two individuals are behind the proposals. One is the President of the Board of Trade. I was told that he was Tarzan in the House. I believe that he once swung the Mace around his head. We should forget that. I have another jungle image for him: that of the snake from The Jungle Book, which says to Mowgli, "Come inside my coils; go to sleep. It is all right—you will be safe." The President of

the Board of Trade is playing that role now. He is saying to the people of Britain, "Go to sleep. Don't worry; it will be all right. The postal service will be safe in my hands." Just like Mowgli, the people of Britain should not listen to the snake behind the privatisation of the Post Office.
The other individual behind the proposals is Mr. Bill Cockburn, a Scot, I am ashamed to say, and the chief executive of the Post Office. When I and other hon. Members met him not long ago, he assured us that he was 100 per cent. behind the idea of keeping the Post Office in the public sector and fighting for commercial freedom.
There was reference earlier to people being intoxicated. Mr. Bill Cockburn is intoxicated by the smell of executive jet fuel. He has been talking to chief executives of other privatised industries, or perhaps he is attracted by the lure of share options that may make him, as it made others, millionaires while the people who work for the Post Office lose their jobs and the people who need the service lose the service.
The Government talk in the Green Paper about separating Counters, but we should examine what is happening in British Gas, which is voluntarily disaggregating its services. The Government are talking about having a retail section and closing 240 showroom outlets. They say that they will not be needed any longer. They will be amalgamated and will offer services for power or power equipment, whether involving gas, electricity or another power source.
The interesting thing about that scenario is that British Gas says that people will pay their gas bills at a post office. At the same time, the Department of Trade and Industry has set a target for the closure of Crown offices; letters have been in the public domain for some time. The Post Office executive has written that it is on target to meet the DTI's targets for the closure of Crown offices. It is important to know that that policy was inspired by the DTI, which pays Mr. Bill Cockburn, who is an employee not of the Post Office but of the DTI. He is paid directly by the DTI; he is on its salary books. It is important, therefore, that we realise that the people calling the tune are the same people who will end up privatising the Post Office.
The hon. Member for Tiverton (Mrs. Browning) said that the Green Paper poses no threat to local sub-post offices, but at a meeting at which I also spoke, the hon. Member for Bury, North (Mr. Burt), the Under-Secretary of State for Social Security, admitted openly to about 60 people that stopping transfer payments by giro encashment was a great attraction. He said that it was much more attractive for payments to be made by bank automated credit transfer because giro encashments cost the Treasury 44p, but bank automated credit transfer costs 4p. The Department of Social Security is immensely attracted to the possibility of people no longer encashing giros at post offices.
The Government deal with automation in the Green Paper. To me, automation means a swipe machine for one's smart card and the ability to put one's money anywhere. Down the road, a deal has been struck with the private sector so that people receive their money through automation. We warned them off, we fought them and we beat them the last time that the Government talked about it, but the paying Department has it in mind that automation should be introduced.
Fifty per cent. of local post offices' income comes from giro encashment. A giro encashment payment costs 44p and payments will cost 4p if they are carried out through an automated bank card or switch card, so post offices'


income will be cut by 91 per cent. Very few local sub-post offices will survive that cut in income. The 2,700 post offices that receive a flat-rate subsidy would probably be joined by another 10,000, or the service would completely fall apart.
The proposal poses a threat to rural communities in Scotland and elsewhere. As a Scottish Labour Member who is sponsored by the Union of Communication Workers, I do not apologise for saying that. My constituency party receives £8,000 for administration as part of that sponsorship, but I receive none of that money. All hon. Members should have to declare their interests in and every single penny that they receive from private consultancies. That would square everyone's idea of how hon. Members should behave.
It can cost up to £10 to send a letter to some parts of the Western Isles or the Orkneys. At the moment, people there receive such a service for a single tariff. The Green Paper contains no guarantee that a uniform tariff will not be much higher in rural areas. A uniform tariff system could mean that a service would cost 25p in the city, but £3 200 miles away, and more than that 500 miles away. It would still be a uniform tariff system. As in the case of British Gas, there is pressure for tariffs to be linked to areas. The same pressure will arise from the privatisation of the Post Office—tariffs will be linked with distance. The system whereby there is one tariff for all first and second class letters will be broken up.
A privatised Post Office would contain no guarantees that the Government will not succumb to the pressure for changes. They will succumb to that pressure because of what will be described as commercial considerations.
During my time with the Union of Communication Workers, however, I have seen a much brighter future for the Post Office. It is a potential transmitter of all sorts of mail, whether that mail is electronic or conveyed by hand. For instance, when electronic shopping is introduced goods will have to be carried to customers. Lives will be changed; the new developments will be a boon—unless the Government say that that bright future must bring profit to some private organisation, and that that is more important than the workers or those who deserve their services.
We must stop this privatisation. I have a simple solution to the problem, and I shall continue to tell people all over the country what I have been telling them already. All summer—indeed, until the present Government are out of office—I shall tell them, "Deselect, or do not vote for, any Member of Parliament who supports the privatisation of the Post Office. That Member of Parliament intends to break up something that is precious to you, and to us."

Mr. Gordon Prentice: I shall be brief, as I want to leave some time for my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham), who is a member of the Select Committee on Trade and Industry.
I was shocked, but not surprised, by the way in which Conservative Members sought to caricature our stance. The Minister said that we wanted to create some kind of North Korean Stalinist state; the whole thing was bizarre and ludicrous. Some common ground exists. The Post Office must change: the Select Committee said that, the Opposition Front Bench has said it and we all believe it.

That is where we part company with the Government, however, because privatisation—in whole or in part—is not the answer.
What do we mean by commercial freedom? Before I deal with that, let me ask a more basic question: why are the Government undertaking this exercise? It is ideologically driven; it is not about improving efficiency or effectiveness in the Post Office; it is as plain as a pikestaff that it is about raising £2 billion to finance tax cuts before the next general election.
Many speakers have reminded the House just how successful the Post Office is. According to the latest annual report, which has just been published, this year's profit amounted to £306 million. It was the 18th successive year of subsidy-free profit. The external financing limit target of £181 million was bettered; the Post Office contributed £182 million to the Treasury coffers. Since 1981, more than £1 billion has gone from the Post Office to the public sector. As I have said, the Government's exercise will not improve efficiency or effectiveness.
Let me tell Conservative Members that the general public feel deep unease and scepticism, which was articulated earlier by the hon. Member for Macclesfield (Mr. Winterton). The wider community believes that the Government will have cause to regret this privatisation. Last year, when the automated credit transfer system posed a threat to sub-post offices, I was inundated with protests: 7,000 people in my constituency, which has an electorate of 62,000, signed petitions which I delivered to 10 Downing street. The response to the current privatisation threat will be much greater.
Those sub-postmasters and postmistresses were not only concerned about automated credit transfer; they were straining at the leash to provide services that the Government have not hitherto allowed sub-post offices to provide. They wanted to act as agents for banks and building societies, and to sell tickets for various events. For months, we witnessed the absurd fiasco of the Government agonising over whether sub-post offices could provide fishing licences. It is the stuff of a hall of mirrors.
I shall pose another fundamental question. What on earth happened to the doctrine of the mandate? The Prime Minister's smiling visage is on the Conservative election manifesto, "The Best Future for Britain", in which there is some mention of the Post Office, but not a word about the privatisation of it. If the doctrine of the mandate means something, surely this threatened legislation should be stopped in its tracks when it reaches the other place.
Some of my hon. Friends, including the hon. Members for Falkirk, East (Mr. Connarty) and for Birmingham, Yardley (Ms Morris), have mentioned the widespread fears that Post Office privatisation will mean only another bonanza in pay and perks for directors and grotesquely generous share option schemes. In fact, the water industry and North West Water, which is the water company in my area, was mentioned by the Prime Minister earlier today. The flotation of the water industry was under-priced by£2 billion and £5 billion of debt was written off to enable privatisation to go ahead. Yet, by common consent, it has been disastrous. Since privatisation, charges have risen by 67 per cent. Another disastrous privatisation is that of British Rail, a natural monopoly. Privatisation of it is faltering and the scales are falling from people's eyes when they see the practical effect of privatisation. The same thing will happen with the Post Office.
Privatisation of the Post Office has been ideologically driven and it has not been thought through. The review gestated for two years during which it looked at all sorts of ways in which to make the Post Office more responsive—allegedly. It looked at breaking up the Post Office into separate functions of letter delivery, sorting and so on, and came to the not surprising conclusion that that was impractical. In fact, that idea was always hare-brained. The two-year delay in bringing forward proposals meant that the Post Office could not develop the services that it wanted. The Post Office complained about being enveloped in a fog of uncertainty and, only a few months ago, the chairman of the Post Office talked of an impending crisis. The way in which the legitimate concerns of the Post Office were swept to one side or ignored for two years spoke volumes. When the President of the Board of Trade appeared before the Select Committee, he explained away the two-year delay in reaching conclusions by saying that it was because of the complexities of the issues. It was complex only because the end gain—privatisation by hook or by crook—was the starting point. Privatisation was the name of the game, not making the organisation more efficient.
The uncertainty over the future of the Post Office was caused by anxiety about external political reaction to privatisation. That point was conceded earlier by the former Minister with responsibility for the Post Office, the hon. Member for Gainsborough and Horncastle (Mr. Leigh), when, in a fit of pique after he was sacked, he accused the Prime Minister of "political funk" because the Prime Minister had failed to grasp the privatisation nettle. Well, they have grasped it now and it will sting them. In fact, the Government's intentions—real "Alice—in-Wonderland" stuff—became clear only because of a leak from the Department of Trade and Industry, which brought the President of the Board of Trade to the House and the subsequent Green Paper before us.
Many parts of the Green Paper have not been examined adequately, such as the extent of the Post Office monopoly, mentioned on page 24, where the Government say that more detailed work will be needed to ensure that, while safeguarding the Royal Mail's monopoly, there is fair competition between it and the new entrants into the market. The Minister for Industry talked about some degree of monopoly, but he could not be more precise than that.
There is a whole range of ways in which the Post Office, within the public sector, could improve the service, as Post Office people and hon. Members on both sides who want the Post Office to be a successful and dynamic organisation want. It is bizarre that the Post Office cannot enter joint ventures and that is a point that we want to address. It is bizarre that the only trading organisation in the public sector—the Post Office—is fettered when it seeks to borrow. There is a whole series of related issues that should be developed, but not with the sword of Damocles of ultimate privatisation hanging over the head of the Post Office. It is possible for the Post Office to stay in the public sector and to deliver the service that people in here and outside want.

Mr. Michael Clapham: As I have only a couple of minutes, I shall merely refer to the suggestions in the report by the Select

Committee on Trade and Industry. The Minister has obviously looked at the recommendation in the report, which is that there is a need for change. However, the report does not suggest any form of ownership. If the Minister has read carefully the minutes of the evidence given by the Post Office management, he will have seen clearly that they were prepared to accept commercialisation. Their view was that if the Post Office was freed from the straitjacket of the external financing limit, it would be able to compete with Post Office services such as those in Sweden, France, Germany and Canada where the post offices are all state owned.
I urge the Minister to consider option one as the major option to go for. It would give the Post Office the opportunity to be able to raise capital on the private market. It would give it the opportunity to enter joint ventures so that it could compete with its main competitors, such as the Dutch post office, and it would allow it to continue its unique service, which is so important to rural constituencies such as mine. My constituency is made up of 21 villages and it depends on the service that the Post Office provides.
I urge the Minister to go for option one. It would give us the opportunity to keep the Post Office in the public sector and, at the same time, it would give it the opportunities that it deserves. It would also ensure jobs for the work force and the uniqueness of the service for the British people.

Mr. Jim Cousins: It gives me particular pleasure to say something about the speech of the new hon. Member for Dagenham (Ms Church) who, in her contribution on this important matter, had the combination of very strong and clear thoughts and a gentle and firm delivery. That is an example to us all and I am sure that we shall hear much more from her in the House.
I begin with a quotation which, I hope, will establish some common ground. In this year's annual report, the chief executive of the Post Office says:
we have ambitions stretching beyond the UK. We have the ability to be a major player in the global postal market and a burning ambition to be the postal administration of first choice—the mailing centre of Europe… And we have a trump card—one of the largest and best workforces and network of sub post offices in the world"—
he evidently did not visualise the separation of the sub-post offices from the rest of the network—
an asset highly valued by customers, clients and the community alike. But, unless we can respond on equal terms to the competition from other overseas post offices and be given the opportunity to offer a wider range of activities at our post offices, we could lose ground at home and abroad and head for a spiral of decline.
We propose to achieve that by offering commercial freedom inside the public sector. Every Opposition Member who has spoken—they spoke for Wolverhampton, Birmingham, Neath and Falkirk—including the members of the Liberal Democrat and Scottish National parties, has supported the idea of achieving success through commercialisation in the public sector. That would combine the trump card of public services with the commercial opportunities that the chief executive mentioned.
In the two years that we have waited for the Green Paper £100 million has been cut from the public investment programme of the Post Office and the price of stamps has


been subject to an entirely unnecessary increase to meet the imposed EFL targets of the Government. As a consequence, the traditional pillar box mail has declined and is falling steadily. If the Government adopt the option that they endorse in the Green Paper, they will proceed to subject the Post Office to entirely unnecessary political controversy. What we propose could be achieved within the public sector and we believe that there is consensus in favour of that option.
My hon. Friend the Member for Vauxhall (Ms Hoey) made an important point when she said that the Post Office's public service is one of those great popular institutions that binds together all parts of the United Kingdom. What the Government endorse is an uncertain, twilight-zone proposal, which contains some illogical contradictions that I should like to point out in the limited time available to me.
It is a fundamental error to see this privatisation—if that is how we are to regard it—as being like those of the past. The productivity gains have already been achieved and, sadly, jobs are being stripped out of the Post Office right now, at a rate of between 5,000 and 8,000 a year. Last year, a 2 per cent. unit cost reduction was achieved in postal services. Those achievements have been made now, inside the public sector.
The fundamental point, which is not disputed by many Conservative Members who spoke in the debate, is that the Post Office service is no natural monopoly. There is no contained infrastructure that gives the Post Office some kind of superiority or exclusive access. It does not have a unique right of access to homes and businesses—it is already competing straightforwardly in those markets. There are 4,000 competitors in the parcels business from TNT down to the bike boys who we see on every street.
There is no controversy about the fact that the Post Office is already in commercial competition. The basis of the network which will keep it together and sustain it in the future—the trump card to which the chief executive of the Post Office referred—is its brand name and its good will. That would be put at risk if we separated post offices from the rest of the network and sold 49 per cent. of what was left.
We believe that the uniform price and universal delivery, which the Government claim to be nonnegotiable, can be sustained in the long run in the face of competitive pressures only by a clear commitment to the Post Office as a public service, underwritten by public ownership and public control. That is our objective. The market cannot guarantee that uniform price and universal delivery. The legal guarantees that the Government promise are worthless outside public control, because if the Government intend that the Post Office should operate as a commercial organisation, they should not impose on it the unusual legal obligations set out in the Green Paper. Nor should they subject it to the internal cross-subsidy requirements, which the undertakings to deliver a standard price and universal delivery inevitably make necessary. In every other privatisation those internal cross-subsidy systems, which are essential to maintain the uniform price and universal delivery, have been the subject of specific attacks from all the regulators. That is why the Government's proposal is insecure and is a twilight zone.
The guarantees that the Government have offered cannot be delivered. Indeed, in the Green Paper, the Government make it clear that the guarantee of uniform price and universal delivery is not the legal guarantee that they offer, but that of the letter monopoly. That creates the critical gap in the whole proposal. We simply do not know how the Government propose to deal with the letter monopoly in the future. If it is withdrawn, the uniform price and universal delivery system will collapse—and it will collapse, whatever guarantees the Government offer in legal terms.
In the Green Paper, there is no guarantee of allowing Post Office Counters to take on new business. It said that that might be possible, but some severe conditions are laid down. Tonight, there is an opportunity for the Minister to make clear how he proposes to deal with that uncertainty because it is far from clear that the bit that is left in the public sector will achieve commercial freedom.
Furthermore, what will sub-post offices make of these proposals? Are they to assume that in the future they will have the exclusive right to deal with Royal Mail and Parcelforce, or will it be possible for a 51 per cent. or 49 per cent. privatised Post Office to allow parallel networks to be created to deliver mail and parcels, bypassing the sub-post offices?
We have been told that there will be a contract. Will there be exclusivity in that contract? If there is no exclusivity, the guarantees to the sub-post offices become virtually meaningless. What we are offered in the Green Paper for sub-post offices is not law, only guidelines—a phrase which may prove to be famous in the history of public administration in this country—under five restrictive conditions.
We come to the whole centre of the gobbledegook, the mishmash which the Government have created around the Green Paper—the mysterious footnote which refers us to the standard international system of national accounts, and justification for the fact that a 49 per cent. Government share ownership in the Post Office means that the Post Office will suddenly achieve commercial freedom. That is the only mechanism by which it can achieve it.
For those of us who have made the standard system of national accounts our bedtime reading, I find it odd that the Government should pick on Jacques Delors' final utterances as a means of securing commercial freedom. It is no wonder that there was a certain cry for help about that from the hon. Member for Leeds, North-West (Dr. Hampson) earlier in the debate.
If there is a dilemma here, it is a dilemma of the Government's own making. Forty-nine per cent. ownership does not give an escape because the same paragraph, which is quoted incompletely in the Green Paper to describe how the national accounts and the public sector should be drawn up, says:
A corporation which a government is able to control as a result of special legislation should be treated as a public corporation even if the government does not own a majority of shares.
If there is a dilemma, and it is a dilemma of the Government's own making, they have not escaped from it.
In the Green Paper, there is absolutely no certainty of securing the future of Post Office services. Yet at the same time the Government propose to load the privatised Post Office—the 50 per cent. plus one share ownership Post Office—with legal obligations which no commercial company would accept.
There is also a central mystery about what the Government intend to do with the share ownership that is left. In the Green Paper, it is not clear whether the Government will vote those shares. We are told that the Government will not routinely vote those shares but that there will be circumstances in which they will vote them. It is therefore vital that now, at the beginning of the process, the Minister makes clear how those shares are to be voted.
The answer lies in one of the Postman Pat stories. Some of us will recall from our literary activities the story entitled, "Postman Pat's Wildcat Chase ", in which Jess the cat—in this case the Government—fatally confuses Mrs. Hubbard's knitting with a woolly monster. This entire discussion about the significance of 49 per cent. plus one or 50 per cent. minus one, and about the possibility of commercial freedom in the public sector, is much the same as wondering whether we are dealing with Mrs. Hubbard's knitting or the woolly monster. Finally, when Postman Pat manages to convince Jess the cat that Mrs. Hubbard's knitting is not a woolly monster, he says,
I'm sorry he made such a mess. I know he didn't mean any harm. He's not really a naughty cat—he was only running for his life.
Perhaps the President of the Board of Trade is running for his life now: his hon. Friends will certainly be running for their lives later.
There is no majority in the country for this. The country well understands the significance of the trump card: the core public services and the good will and public support on which the future commercial opportunities of the Post Office depend. We propose to take up the cause of the public and to defend that trump card. We shall defend a public brand name that has been established over 150 years, and the public good will that is reflected in the core public services.
We shall resist this break-up. We shall not accept Government legislation introduced to dismember the Post Office's services. There is an alternative and, in a half-hearted way, it is already on the table. That is the alternative that we shall begin to argue for.

Mr. McLoughlin: Can the hon. Gentleman confirm what he said earlier—that if the Government decide to move forward with their preferred option, a future Labour Government would buy back the shares and renationalise the Royal Mail?

Mr. Cousins: I certainly did not say that

Mr. Peter Ainsworth: rose—

Mr. Cousins: Let me deal with this point first. I adopted the same formula as my hon. Friend the Member for Livingston used. When asked the question, he clearly said that we think the Government are mistaken and foolish to embark on this. We cannot predict whether they will persist in their foolishness. If they do, we cannot predict how the House of Commons will react to it. Even if the House agrees to it, we cannot be sure what precise form it will agree to. However, should the option that the Government are advancing pass into law, we would seek to re-establish public control over these core public services. That is our policy and our intention and, if I have understood matters aright, it is also the policy of all the Opposition parties represented in the debate.

Mr. French: When asked earlier whether a future Labour Government, if there were one, would renationalise the Post Office, the hon. Gentleman's answer was yes.

Mr. Cousins: I did not say that a future Labour Government would renationalise the Post Office, or that they would buy back shares. The Government have invented those fictions. Like poor Jess the cat, they cannot distinguish woolly monsters from Mrs. Hubbard's knitting.

Mr. Peter Ainsworth: The hon. Gentleman can resort to as many formulae as he likes. It was quite clear to me, and I asked the question, that the hon. Gentleman said that a future Labour Government, should one exist, would seek to renationalise the Post Office. The hon. Member for Livingston (Mr. Cook) will be able to read that in Hansard tomorrow morning.

Mr. Cousins: My hon. Friend the Member for Livingston will be able to read all my remarks on that matter with complete comfort, because they entirely echo his remarks at the start of the debate.
We return to the heart of the proposition. The central point was made, in a way, by the intervention of the hon. Member for Macclesfield. I do not know how we should regard him in the House, but he sits on the Conservative Benches. He, too, said that the public wanted and desired commercial freedom in the public sector. That is what the people of the country want. The Government oppose that, and are putting forward the twilight zone solution in which a public service will be broken in two and the Royal Mail and parcels will in future be neither one thing nor the other. Neither the markets nor anyone else will understand the balance of power in the organisation that the Government propose to create in their preferred option.
We say to the Government kindly and gently, as we always do—clearly, gently and firmly, in the style suggested to the House by my hon. Friend the Member for Dagenham—that if they persist in that, perhaps it would be time for them to go home and think once again.

The Parliamentary Under-Secretary of State for Technology (Mr. Patrick McLoughlin): I agree with the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) on one thing: I pay tribute to his hon. Friend the Member for Dagenham (Ms Church) on her first speech to the House. I heard the speech this afternoon, and it was an impressive performance. She spoke with great clarity and feeling.
I notice that the hon. Lady's predecessor, one-time Labour party leadership contender, and at one time no doubt Prime Minister contender, has decided to desert the country for a country that has now privatised its post office service. I thought that that was perhaps an adequate way to start the debate.
I congratulate the hon. Lady. We all feel for her, because we all know what a trial it is to get one's maiden speech out of the way and to start to get more into the hurly-burly of the House of Commons.
Of the speeches of the 10 Labour Back Benchers who spoke, there were four interesting contributions, from the hon. Members for Falkirk, East (Mr. Connarty), for Neath (Mr. Hain), for Vauxhall (Ms Hoey) and for Birmingham, Yardley (Ms Morris). I would expect them to make interesting contributions, because they are all sponsored by the Union of Communication Workers, and it is a pity that


perhaps—[Interruption.]—it is a pity that perhaps some of them did not declare it right at the beginning of their speech. Indeed, the hon. Member for Falkirk, East—I pay tribute to him—goes a little further and says that he gets £8,000 a year from the UCW in the Members' register.

Mr. Connarty: The hon. Gentleman does not recall accurately. I said that my constituency party receives £8,000 for its administration. I receive no personal remuneration.

Mr. McLoughlin: I apologise to the hon. Gentleman if I misquoted him, but I thought that it was worth putting those four contributions on the record.
We have had several demands today from the hon. Member for Newcastle upon Tyne, Central and others about the commercial freedoms that they keep talking about that they would like the Post Office to have. That is interesting. They often speak about commercial freedoms, but whenever the idea of extending further freedoms to the Post Office is mooted we often receive letters from leading members of the Opposition Front Bench team, saying that perhaps those freedoms should not be given.
I have one such letter from the Opposition Chief Whip, the right hon. Member for Bishop Auckland (Mr. Foster), which says:
I enclose a copy of a report from a recent issue of the Northern Echo. I do hope that you will ensure that the fullest consultations are carried out before any such proposal for the Post Office to deliver Sunday papers by the post is arrived at.
So the Opposition continually ask for extra commercial freedoms for the Post Office, but every time that more commercial freedoms are even considered or suggested, the alarm bells rise from the Opposition Benches.
Although, as we have made clear, we are seeking views, there are three cardinal things that we stand by, and on which we are not prepared to negotiate. Those commitments include a commitment to a nationwide letter and parcels service, with daily delivery to every address in the country. I say to my hon. Friend the Member for Tiverton (Mrs. Browning) that that involves delivery on six days to every home.
We are committed to a uniform and affordable price structure under which it will cost the public the same to post a letter no matter where it is posted or to where it is sent throughout the United Kingdom. We are also committed to a nationwide network of post offices, and we need no lectures from the Opposition about the importance of that. Some of my hon. Friends who represent rural constituencies have a number of post offices in their areas and we strongly feel that they should be given the extra commercial freedoms set out in the Green Paper.
Our postal services are operating in a world of rapid change. They must adapt if they are to thrive as businesses in the face of growing competition and if they are to continue to meet the needs and demands of their customers. A policy of standing still will not preserve our postal services, nor will it protect the jobs that the hon. Member for Neath and other hon. Members spoke so much about. It will simply ossify them and condemn them to gradual decline. Our postal services recognise the need to change while maintaining and improving their standards of service and preserving the three non-negotiable commitments to which I have referred.

Mr. Hain: If the Minister is so keen on change and on meeting the competitive demands that are undoubtedly bearing down on the Post Office, why do the Government not give commercial freedom now instead of waiting the 18 months or so that will be needed to put a Bill through Parliament—if it gets through Parliament? Why not give commercial freedom now so that we can take on the Dutch and the others?

Mr. McLoughlin: We have made it fairly clear that we are consulting on the options. It is important to move forward with the right proposals and I am surprised that the hon. Gentleman condemns that.
As I have said, our postal services are operating in a world of rapid change and must adapt if they are to thrive as businesses in the face of growing competition. The fact that we are addressing those issues and charting a way forward for the Post Office is greatly welcomed, certainly by people to whom I have spoken.
The changes facing our post office network, the largest retail network in Europe, are of course different from those confronting Royal Mail. Most services that are available in post offices are now available elsewhere and new shopping habits have evolved with the shift from smaller retailers to larger stores. To enable our post offices to respond positively to that challenge, the Government have decided to allow Post Office Counters greater commercial freedom within the existing structure. That will allow our post office network to provide a wider range of services on behalf of new and existing private sector clients. Moreover, new technology offers the opportunity to automate much of the routine clerical work which, like bindweed, is strangling the business. The Government have made it clear that they intend to bring those changes rapidly to fruition.
The hon. Member for Falkirk, East attacked British Gas, which has signed a contract with the Post Office to enable people to pay gas bills at the Post Office without charge. I thought that the hon. Gentleman would have welcomed that rather than condemn it. I certainly think that most customers and constituents welcome it.

Mr. Connarty: The Minister seems to have a paranoia this evening. I think I said that, while it had been decided that people could pay their gas bills through post offices, the irony was that the Post Office and DTI target was to close post offices throughout the country.

Mr. McLoughlin: The hon. Gentleman is wrong again. Many closures occur because no one is willing to take on the franchise. The hon. Gentleman is talking about the conversion programme for Crown post offices. As the hon. Member for Gordon (Mr. Bruce) said, although there is sometimes controversy on the announcement of changes, the service that is provided by the people who take over the franchise greatly improves and that is to the benefit of local consumers and townspeople. We shall not take any lectures from the Opposition on that.
I have no doubt that the Opposition are full of good intentions when they talk about giving greater commercial freedom. But no Labour Government have ever done that and I doubt that when the call comes to punch a future Labour Government will be able to do it—if Labour were ever elected to govern. We often talk about intent but the reality of government is different from the reality of opposition. I remind the Opposition of what the last Labour Chancellor of the Exchequer said at a Labour party conference. He said:


I am going to negotiate with the IMF on the basis of our existing policies, not changes in policies, and I need your support to do it. But when I say 'existing policies' I mean things we do not like as well as things we do like. It means sticking to the very painful cuts in public expenditure on which the Government has already decided. It means sticking to a pay policy which enables us, as the TUC resolved a week or two ago, to continue the attack on inflation.
It is easy when in opposition to forget the responsibilities of Government. Labour Members are so dismissive of the past.
The hon. Member for Vauxhall said she did not believe that we would stick by any of the commitments we have given, such as a universal tariff and a free service for the blind. That was the sort of argument Labour Members used when we privatised British Telecom. What has happened since? There has been massive investment in telecommunications, there are more telephone boxes and, even more incredible, they actually work. We will listen to no lectures from them about providing and improving universal services. Every time they talk about such matters, they are wrong. We have taken the correct action and improved the service to the consumer. In addition, the companies that we have privatised have become world leaders and have attracted a large amount of new business.
My hon. Friend the Member for Leeds, North-West (Dr. Hampson) served on the Select Committee and he told us of some of the arguments put and points raised during its consideration of the report. My hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh), who has great knowledge of these matters, asked a number of questions. In effect, he asked me to pre-judge the Government's consultation exercise. He also made a number of suggestions about ways in which he wanted us to go further. I want to reflect carefully on his speech and include it in our consultation exercise. He made a number of recommendations that we may wish to follow at a later stage. I assure him that I have taken on board some of his points.

Mr. Cousins: The hon. Member for Gainsborough and Horncastle (Mr. Leigh) described the offer of new business for Post Office Counters as mealy-mouthed. He said that the Government were imposing conditions by saying that the market was well served by the private sector, by questioning whether the involvement of Post Office Counters would create market power and by saying that there was a need to ensure that third parties were not discomfited. Is the Minister saying that he is taking the hon. Gentleman's point seriously?

Mr. McLoughlin: I do not know how the hon. Gentleman has the cheek to refer to the Government as mealy-mouthed. He should remember how he tried to scoot away from answering the clear point raised by my hon. Friend the Member for Surrey, East (Mr. Ainsworth).
When the hon. Member for Livingston (Mr. Cook) appeared on the "Today" programme, he was constantly pushed by Peter Hobday to say whether he would renationalise the Post Office. Finally, the hon. Gentleman said:
No. Hang on, hang on. Let me answer your question. At the moment the Post Office is in the public sector. We want to keep in there. If it is put in the private sector we will consider that question when and if the time arrives. I must say that I personally would not rule out bringing it back.
Of course, the hon. Gentleman has to get his new orders from whoever is chosen to lead his party, whether it is a moderniser or someone else.
The Labour party's policies change at each general election. Its 1992 manifesto said:
The provision of water is so fundamental that it is a priority for return to public control… We will restore public control of the National Grid and give it new duties and powers to ensure the long-term security of electricity supplies. They"—
that is the Conservatives—
would, if they won power again, privatise water, electricity, steel and other services, and the industries built up from the public investment over past years… We shall extend social ownership by a variety of means, as set out in Labour's detailed proposals. In particular, we will set up British Enterprise, to take a socially owned stake in high-tech industries and other concerns where public funds are used to strengthen investment… Social ownership of basic utilities like gas and water is vital to ensure that every individual has access to their use and that the companies contribute to Britain's industrial recovery, for instance, by buying British. We shall start by using the existing 49 per cent. holding in British Telecom to ensure proper influence in their decisions.".
They do not say what is proper.
If any party is blinded by dogma, it is the Labour party and its dogma of constantly believing in the public sector. They have been repeating the dogma of public good, private bad at length today. We are the only party addressing the serious and wide-ranging issues to ensure that the Post Office survives and expands its business into the next century.
I was asked a number of questions to which I shall try to respond. The hon. Member for Birmingham, Yardley (Ms Morris) asked about pensions. The Government are well aware of the importance of protecting pension rights of past and present employees. That is why we have given an undertaking, expressed in the Green Paper, that such rights will be safeguarded. The precise mechanism for dealing with pension arrangements in any legislation will have to be worked out with the companies concerned and we will take into account the representations of pensioners, but I give the House an assurance that employees and pensioners will continue to enjoy pension rights that are at least as good as they have at present.
The hon. Member for Gordon and, in an intervention, the hon. Member for Neath asked about Sunday collections. Perhaps they were a little unwise to raise that subject. A number of services, such as the second daily delivery of mail and Sunday collections, are not currently part of Royal Mail's social commitment, but it is an operational matter to ensure that quality targets, such as the percentage of first-class letters delivered the next working day, are not only met but improved. If, for example, the second delivery did not exist in the vast majority of places, Royal Mail could not deliver 92 per cent. of first-class mail the next working day—a figure that has made it the highest quality postal administration in Europe.
If we proceed with the Government's preferred option, we will write specific safeguards into the terms of their appointment. The targets are demanding and could well cover issues such as Sunday collections and the timing of daily deliveries. They will be subject to the scrutiny of the regulator, who will ensure that the service received by the public goes from strength to strength.
It is interesting to ask when Sunday collections were suspended. When did Royal Mail do away with Sunday collections? It will come as no surprise to the House that Sunday collections were suspended in 1976, no doubt with the agreement of the then Secretary of State or the person then responsible for the Post Office. So the improved efficiencies have been achieved and encouraged under a Conservative Government. We shall not privatise an


industry to see it give a worse service to the public; we shall want a better service to the public, as we have seen with every single privatisation we have pursued through the House. When the hon. Gentleman asked about the Sunday collection, he hit on a very poor point. It is interesting to see that somebody who usually jumps to his feet every time he is challenged on any subject is stuck to his seat as if he were stuck there with Loctite glue—perhaps that would be a favour to us all.
My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) echoed a point made by a number of my hon. Friends about the importance of the post offices in their constituencies. That was also mentioned by my hon. Friend the Member for Surrey, East who spoke about nationwide collection.
We heard the usual scare stories from the Scottish nationalists. The hon. Member for Angus, East (Mr. Welsh) could not have read the Green Paper because its assurances go a long way to meeting the concerns that he expressed.

Mr. Welsh: If there is genuine consultation and the majority of people oppose the Government's plans, will they withdraw their plans—or is it a case of the usual sham?

Mr. McLoughlin: I made it clear, as did my right hon. Friend the Minister for Industry, that there will be consultation. At the end of the day, when the Government bring forward legislation, it will be for Parliament to take a view. There will be wide consultation with all the people involved. We have not embarked on consultation to ignore what emerges from that exercise.
We have heard many scare stories from Opposition parties about every privatisation. In 1985, the right hon. Member for Salford, East (Mr. Orme) said that there was no evidence that the gas privatisation Bill would improve efficiency, provide a better service, produce cheaper gas or release or create competition. The hon. Member for Gordon said that 16 million gas consumers could expect only one result—to pay increased gas prices, higher than the rate of inflation, for years to come. As those remarks illustrate, the privatisation and subsequent regulation of British Gas provided an early example of what Labour and the Liberal Democrats repeatedly called privatisations too far.
The privatisation of British Gas was a great success for consumers. Their experience before and since privatisation could hardly have been more different. In the early 1980s, domestic gas prices rose more than one third in real terms. Since privatisation in 1986, real-term prices have fallen below their January 1979 level. In July 1992, real-term prices were cut by an average 3 per cent., and a further 2 per cent. reduction occurred in October. Inflation was running at about 4 per cent. The number of disconnections also substantially reduced—something that I thought Opposition parties would welcome.
We heard then all the scare stories that we heard today. That is all that the Opposition can live off and fight with. When we take privatisation forward, their scare stories are knocked out and disproved. We will bear that important point in mind as we go through the consultation process.
Opposition Members have approached this privatisation with the closed minds that we have come to expect of them.

From the start, they ruled out the option of privatisation, even though some of the most successful companies in Britain today were privatised. The Opposition have resorted to the scare stories that they trotted out in the past. In the Second Reading debate on the Telecommunications Bill, the right hon. Member for Salford, East said:
Despite the Minister's assurances, we remain unconvinced that the level and range of services available will be continued. We maintain that market forces will demand that a privately owned BT cuts those services that incur a loss or make little profit. Rural services, emergency services, call boxes and provision for the blind and the disabled have an uncertain future."—[Official Report, 18 July 1994; Vol. 46, c. 41.]
The Opposition said that when we privatised British Telecom, but look what happened. The number of BT call boxes has risen from 77,000 in 1984 to more than 100,000 today, and 96 per cent. of them work at any one time—up from only 75 per cent. six or seven years ago. The service is improving all the time. BT completes 95 per cent. of customer installations within the agreed time. Its main tariffs have fallen more than 30 per cent. in real terms since privatisation and will continue to fall at a rate of retail price index minus 7.5 per cent.
The leopards on the Benches opposite have not changed their spots. For all their talk of modernisation, their diet is still public sector ownership, Government control and clause 4 socialism. The Opposition want to give Royal Mail all the commercial freedoms of the private sector but none of the financial disciplines, with all the security of being in the public sector. So much for control of public expenditure. They want to do something that no Labour Government found a way of doing in the past.
What we have heard today has been the irresponsible attack of an Opposition. What is more, despite the fine-sounding promises from Opposition Members about the far-reaching changes that they want, the Labour party has shown itself today to be convinced of the merits of public ownership, and has promised to take Royal Mail back into the public sector if the Government's preferred option is implemented. What would be next? British Telecom? British Gas? Electricity? We await the answers with great interest. In the meantime, I commend the amendment in the name of the Prime Minister to my hon. Friends.

Question put, That the original words stand part of the Question: —

The House divided: Ayes 273, Noes 305.

Division No. 292]
[9.59 pm


AYES


Abbott, Ms Diane
Boyes, Roland


Adams, Mrs Irene
Bradley, Keith


Ainger, Nick
Bray, Dr Jeremy


Allen, Graham
Brown, Gordon (Dunfermline E)


Armstrong, Hilary
Brown, N. (N'c'tle upon Tyne E)


Ashdown, Rt Hon Paddy
Bruce, Malcolm (Gordon)


Ashton, Joe
Burden, Richard


Austin-Walker, John
Byers, Stephen


Banks, Tony (Newham NW)
Cabom, Richard


Barnes, Harry
Callaghan, Jim


Barron, Kevin
Campbell, Mrs Anne (C'bridge)


Battle, John
Campbell, Menzies (Fife NE)


Bayley, Hugh
Campbell, Ronnie (Blyth V)


Beith, Rt Hon A. J.
Campbell-Savours, D. N.


Bell, Stuart
Canavan, Dennis


Benn, Rt Hon Tony
Cann, Jamie


Bennett, Andrew F.
Carlile, Alexander (Montgomry)


Bermingham, Gerald
Chidgey, David


Berry, Roger
Chisholm, Malcolm


Blunkett, David
Church, Judith


Boateng, Paul
Clapham, Michael






Clarke, Dr David (South Shields)
Hoyle, Doug


Clarke, Eric (Midlothian)
Hughes, Kevin (Doncaster N)


Clarke, Tom (Monklands W)
Hughes, Robert (Aberdeen N)


Clelland, David
Hughes, Roy (Newport E)


Clwyd, Mrs Ann
Hughes, Simon (Southwark)


Coffey, Ann
Hutton, John


Cohen, Harry
Illsley, Eric


Connarty, Michael
Ingram, Adam


Cook, Frank (Stockton N)
Jackson, Glenda (H'stead)


Cook, Robin (Livingston)
Jackson, Helen (Shef'ld, H)


Corbett, Robin
Jamieson, David


Corbyn, Jeremy
Jones, Barry (Alyn and D'side)


Corston, Ms Jean
Jones, Jon Owen (Cardiff C)


Cousins, Jim
Jones, Lynne (B'ham S O)


Cox, Tom
Jones, Martyn (Clwyd, SW)


Cunliffe, Lawrence
Jones, Nigel (Cheltenham)


Cunningham, Jim (Covy SE)
Jowell, Tessa


Cunningham, Rt Hon Dr John
Kaufman, Rt Hon Gerald


Darling, Alistair
Keen, Alan


Davidson, Ian
Kennedy, Charles (Ross, C&amp;S)


Davies, Bryan (Oldham C'tral)
Khabra, Piara S.


Davies, Rt Hon Denzil (Llanelli)
Kilfedder, Sir James


Davies, Ron (Caerphilly)
Kilfoyle, Peter


Davis, Terry (B'ham, H'dge H'l)
Kinnock, Rt Hon Neil (Islwyn)


Denham, John
Kirkwood, Archy


Dewar, Donald
Lestor, Joan (Eccles)


Dixon, Don
Lewis, Terry


Dobson, Frank
Litherland, Robert


Donohoe, Brian H.
Livingstone, Ken


Dunwoody, Mrs Gwyneth
Lloyd, Tony (Stretford)


Eastham, Ken
Llwyd, Elfyn


Enright, Derek
Loyden, Eddie


Evans, John (St Helens N)
Lynne, Ms Liz


Ewing, Mrs Margaret
McAllion, John


Fatchett, Derek
McAvoy, Thomas


Faulds, Andrew
McCartney, Ian


Field, Frank (Birkenhead)
Macdonald, Calum


Fisher, Mark
McFall, John


Flynn, Paul
McKelvey, William


Foster, Rt Hon Derek
Mackinlay, Andrew


Foster, Don (Bath)
McLeish, Henry


Foulkes, George
Maclennan, Robert


Fraser, John
McMaster, Gordon


Fyfe, Maria
McNamara, Kevin


Galloway, George
MacShane, Denis


Gapes, Mike
Madden, Max


Garrett, John
Maddock, Mrs Diana


George, Bruce
Mahon, Alice


Gerrard, Neil
Mandelson, Peter


Gilbert, Rt Hon Dr John
Marek, Dr John


Godman, Dr Norman A.
Marshall, David (Shettleston)


Godsiff, Roger
Marshall, Jim (Leicester, S)


Golding, Mrs Llin
Martin, Michael J. (Springburn)


Gordon, Mildred
Martlew, Eric


Graham, Thomas
Maxton, John


Grant, Bernie (Tottenham)
Meacher, Michael


Griffiths, Nigel (Edinburgh S)
Meale, Alan


Griffiths, Win (Bridgend)
Michael, Alun


Grocott, Bruce
Michie, Bill (Sheffield Heeley)


Gunnell, John
Michie, Mrs Ray (Argyll Bute)


Hain, Peter
Milburn, Alan


Hall, Mike
Miller, Andrew


Hanson, David
Mitchell, Austin (Gt Grimsby)


Hardy, Peter
Moonie, Dr Lewis


Harman, Ms Harriet
Morgan, Rhodri


Harvey, Nick
Morley, Elliot


Hattersley, Rt Hon Roy
Morris, Rt Hon A. (Wy'nshawe)


Henderson, Doug
Morris, Estelle (B'ham Yardley)


Hendron, Dr Joe
Morris, Rt Hon J. (Aberavon)


Heppell, John
Mowlam, Marjorie


Hill, Keith (Streatham)
Mudie, George


Hinchliffe, David
Mullin, Chris


Hodge, Margaret
Oakes, Rt Hon Gordon


Hoey, Kate
O'Brien, Michael (N W'kshire)


Hogg, Norman (Cumbernauld)
O'Brien, William (Normanton)


Home Robertson, John
O'Hara, Edward


Hood, Jimmy
Olner, William


Hoon, Geoffrey
O'Neill, Martin


Howarth, George (Knowsley N)
Orme, Rt Hon Stanley


Howells, Dr. Kim (Pontypridd)
Parry, Robert





Patchett, Terry
Squire, Rachel (Dunfermline W)


Pendry, Tom
Steel, Rt Hon Sir David


Pickthall, Colin
Steinberg, Gerry


Pike, Peter L.
Stevenson, George


Pope, Greg
Stott, Roger


Powell, Ray (Ogmore)
Strang, Dr. Gavin


Prentice, Ms Bridget (Lew'm E)
Straw, Jack


Prentice, Gordon (Pendle)
Sutcliffe, Gerry


Purchase, Ken
Taylor, Mrs Ann (Dewsbury)


Quin, Ms Joyce
Thompson, Jack (Wansbeck)


Radice, Giles
Timms, Stephen


Randall, Stuart
Tipping, Paddy


Raynsford, Nick
Turner, Dennis


Redmond, Martin
Tyler, Paul


Reid, Dr John
Vaz, Keith


Rendel, David
Walker, Rt Hon Sir Harold


Robinson, Geoffrey (Co'try NW)
Wallace, James


Roche, Mrs. Barbara
Walley, Joan


Rogers, Allan
Wardell, Gareth (Gower)


Rooker, Jeff
Wareing, Robert N


Rooney, Terry
Watson, Mike


Ross, Ernie (Dundee W)
Welsh, Andrew


Rowlands, Ted
Wicks, Malcolm


Ruddock, Joan
Wigley, Dafydd


Salmond, Alex
Williams, Rt Hon Alan (Sw'n W)


Sedgemore, Brian
Williams, Alan W (Carmarthen)


Sheerman, Barry
Wilson, Brian


Sheldon, Rt Hon Robert
Winnick, David


Shore, Rt Hon Peter
Wise, Audrey


Short, Clare
Worthington, Tony


Simpson, Alan
Wray, Jimmy


Skinner, Dennis
Wright, Dr Tony


Smith, Andrew (Oxford E)
Young, David (Bolton SE)


Smith, Llew (Blaenau Gwent)



Snape, Peter
Tellers for the Ayes:


Soley, Clive
Mr. John Cummings and


Spearing, Nigel
Mr. Jim Dowd.


Spellar, John



NOES


Ainsworth, Peter (East Surrey)
Browning, Mrs. Angela


Aitken, Jonathan
Bruce, Ian (S Dorset)


Alexander, Richard
Budgen, Nicholas


Alison, Rt Hon Michael (Selby)
Burns, Simon


Allason, Rupert (Torbay)
Burt, Alistair


Amess, David
Butler, Peter


Ancram, Michael
Butterfill, John


Arbuthnot, James
Carlisle, John (Luton North)


Arnold, Jacques (Gravesham)
Carlisle, Sir Kenneth (Lincoln)


Arnold, Sir Thomas (Hazel Grv)
Carrington, Matthew


Ashby, David
Carttiss, Michael


Atkins, Robert
Cash, William


Atkinson, David (Bour'mouth E)
Channon, Rt Hon Paul


Atkinson, Peter (Hexham)
Churchill, Mr


Baker, Rt Hon K. (Mole Valley)
Clappison, James


Baker, Nicholas (Dorset North)
Clark, Dr Michael (Rochford)


Baldry, Tony
Clarke, Rt Hon Kenneth (Ruclif)


Banks, Matthew (Southport)
Clifton-Brown, Geoffrey


Banks, Robert (Harrogate)
Coe, Sebastian


Bates, Michael
Colvin, Michael


Batiste, Spencer
Congdon, David


Bellingham, Henry
Conway, Derek


Bendall, Vivian
Coombs, Anthony (Wyre For'st)


Beresford, Sir Paul
Coombs, Simon (Swindon)


Biffen, Rt Hon John
Cope, Rt Hon Sir John


Blackburn, Dr John G.
Couchman, James


Body, Sir Richard
Cran, James


Bonsor, Sir Nicholas
Currie, Mrs Edwina (S D'by'ire)


Booth, Hartley
Curry, David (Skipton &amp; Ripon)


Boswell, Tim
Davies, Quentin (Stamford)


Bottomley, Peter (Eltham)
Davis, David (Boothferry)


Bottomley, Rt Hon Virginia
Day, Stephen


Bowden, Sir Andrew
Deva, Nirj Joseph


Bowis, John
Devlin, Tim


Boyson, Rt Hon Sir Rhodes
Dickens, Geoffrey


Brandreth, Gyles
Dicks, Terry


Brazier, Julian
Dorrell, Stephen


Bright, Graham
Douglas-Hamilton, Lord James


Brooke, Rt Hon Peter
Dover, Den


Brown, M. (Brigg &amp; Cl'thorpes)
Duncan, Alan






Duncan-Smith, Iain
Kirkhope, Timothy


Dunn, Bob
Knapman, Roger


Durant, Sir Anthony
Knight, Mrs Angela (Erewash)


Dykes, Hugh
Knight, Greg (Derby N)


Eggar, Tim
Knox, Sir David


Elletson, Harold
Kynoch, George (Kincardine)


Emery, Rt Hon Sir Peter
Lait, Mrs Jacqui


Evans, David (Welwyn Hatfield)
Lamont, Rt Hon Norman


Evans, Jonathan (Brecon)
Lang, Rt Hon Ian


Evans, Nigel (Ribble Valley)
Lawrence, Sir Ivan


Evans, Roger (Monmouth)
Legg, Barry


Evennett, David
Leigh, Edward


Faber, David
Lennox-Boyd, Mark


Fabricant, Michael
Lester, Jim (Broxtowe)


Fairbairn, Sir Nicholas
Lidington, David


Fenner, Dame Peggy
Lightbown, David


Field, Barry (Isle of Wight)
Lilley, Rt Hon Peter


Fishburn, Dudley
Lloyd, Rt Hon Peter (Fareham)


Forman, Nigel
Lord, Michael


Forsyth, Michael (Stirling)
Luff, Peter


Forth, Eric
Lyell, Rt Hon Sir Nicholas


Fowler, Rt Hon Sir Norman
MacGregor, Rt Hon John


Fox, Dr Liam (Woodspring)
MacKay, Andrew


Fox, Sir Marcus (Shipley)
Maclean, David


Freeman, Rt Hon Roger
McLoughlin, Patrick


French, Douglas
McNair-Wilson, Sir Patrick


Fry, Sir Peter
Madel, Sir David


Gale, Roger
Maitland, Lady Olga


Gallie, Phil
Malone, Gerald


Gardiner, Sir George
Mans, Keith


Garel-Jones, Rt Hon Tristan
Marland, Paul


Garnier, Edward
Marlow, Tony


Gill, Christopher
Marshall, John (Hendon S)


Goodson-Wickes, Dr Charles
Martin, David (Portsmouth S)


Gorman, Mrs Teresa
Mates, Michael


Gorst, Sir John
Mawhinney, Rt Hon Dr Brian


Grant, Sir A. (Cambs SW)
Mellor, Rt Hon David


Greenway, Harry (Ealing N)
Merchant, Piers


Greenway, John (Ryedale)
Mitchell, Andrew (Gedling)


Griffiths, Peter (Portsmouth, N)
Mitchell, Sir David (Hants NW)


Grylls, Sir Michael
Moate, Sir Roger


Gummer, Rt Hon John Selwyn
Monro, Sir Hector


Hague, William
Moss, Malcolm


Hamilton, Rt Hon Sir Archie
Needham, Rt Hon Richard


Hamilton, Neil (Tatton)
Nelson, Anthony


Hampson, Dr Keith
Neubert, Sir Michael


Hanley, Jeremy
Newton, Rt Hon Tony


Hannam, Sir John
Nicholls, Patrick


Hargreaves, Andrew
Nicholson, David (Taunton)


Harris, David
Nicholson, Emma (Devon West)


Haselhurst, Alan
Norris, Steve


Hawkins, Nick
Onslow, Rt Hon Sir Cranley


Hawksley, Warren
Oppenheim, Phillip


Hayes, Jerry
Ottaway, Richard


Heald, Oliver
Paice, James


Heathcoat-Amory, David
Patten, Rt Hon John


Hendry, Charles
Pattie, Rt Hon Sir Geoffrey


Higgins, Rt Hon Sir Terence L.
Pawsey, James


Hill, James (Southampton Test)
Peacock, Mrs Elizabeth


Hogg, Rt Hon Douglas (G'tham)
Pickles, Eric


Horam, John
Porter, Barry (Wirral S)


Hordern, Rt Hon Sir Peter
Porter, David (Waveney)


Howard, Rt Hon Michael
Portillo, Rt Hon Michael


Howarth, Alan (Strat'rd-on-A)
Powell, William (Corby)


Howell, Rt Hon David (G'dford)
Rathbone, Tim


Howell, Sir Ralph (N Norfolk)
Redwood, Rt Hon John


Hughes Robert G. (Harrow W)
Renton, Rt Hon Tim


Hunt, Sir John (Ravensbourne)
Richards, Rod


Hunter, Andrew
Riddick, Graham


Jack, Michael
Rifkind, Rt Hon. Malcolm


Jackson, Robert (Wantage)
Robathan, Andrew


Jenkin, Bernard
Roberts, Rt Hon Sir Wyn


Jessel, Toby
Robertson, Raymond (Ab'd'n S)


Johnson Smith, Sir Geoffrey
Robinson, Mark (Somerton)


Jones, Gwilym (Cardiff N)
Roe, Mrs Marion (Broxboume)


Jones, Robert B. (W Hertfdshr)
Rowe, Andrew (Mid Kent)


Jopling, Rt Hon Michael
Rumbold, Rt Hon Dame Angela


Kellett-Bowman, Dame Elaine
Ryder, Rt Hon Richard


Key, Robert
Sackville, Tom


King, Rt Hon Tom
Sainsbury, Rt Hon Tim





Scott, Rt Hon Nicholas
Thompson, Patrick (Norwich N)


Shaw, David (Dover)
Thornton, Sir Malcolm


Shaw, Sir Giles (Pudsey)
Thurnham, Peter


Shephard, Rt Hon Gillian
Townend, John (Bridlington)


Shepherd, Colin (Hereford)
Townsend, Cyril D. (Bexl'yh'th)


Shersby, Michael
Tracey, Richard


Sims, Roger
Tredinnick, David


Skeet, Sir Trevor
Trend, Michael


Smith, Sir Dudley (Warwick)
Trotter, Neville


Smith, Tim (Beaconsfield)
Twinn, Dr Ian


Soames, Nicholas
Vaughan, Sir Gerard


Speed, Sir Keith
Viggers, Peter


Spencer, Sir Derek
Waldegrave, Rt Hon William


Spicer, Sir James (W Dorset)
Walden, George


Spicer, Michael (S Worcs)
Walker, Bill (N Tayside)


Spink, Dr Robert
Wardle, Charles (Bexhill)


Spring, Richard
Waterson, Nigel


Sproat, Iain
Watts, John


Squire, Robin (Hornchurch)
Wells, Bowen


Stanley, Rt Hon Sir John
Wheeler, Rt Hon Sir John


Steen, Anthony
Whitney, Ray


Stephen, Michael
Whittingdale, John


Stern, Michael
Wiggin, Sir Jerry


Stewart, Allan
Wilkinson, John


Streeter, Gary
Willetts, David


Sumberg, David
Wilshire, David


Sweeney, Walter
Wolfson, Mark


Sykes, John
Wood, Timothy


Tapsell, Sir Peter
Yeo, Tim


Taylor, Ian (Esher)
Young, Rt Hon Sir George


Taylor, John M. (Solihull)



Taylor, Sir Teddy (Southend, E)
Tellers for the Noes:


Temple-Morris, Peter
Mr. Sydney Chapman and


Thomason, Roy
Mr. Irvine Patnick.


Thompson, Sir Donald (C'er V)

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments).

The House divided: Ayes 303, Noes 247

Division No. 293]
[10.15 pm


AYES


Ainsworth, Peter (East Surrey)
Brandreth, Gyles


Aitken, Jonathan
Brazier, Julian


Alexander, Richard
Bright, Graham


Alison, Rt Hon Michael (Selby)
Brooke, Rt Hon Peter


Allason, Rupert (Torbay)
Brown, M. (Brigg &amp; Cl'thorpes)


Amess, David
Browning, Mrs. Angela


Ancram, Michael
Bruce, Ian (S Dorset)


Arbuthnot, James
Budgen, Nicholas


Arnold, Jacques (Gravesham)
Burns, Simon


Arnold, Sir Thomas (Hazel Grv)
Burt, Alistair


Ashby, David
Butcher, John


Atkins, Robert
Butler, Peter


Atkinson, David (Bour'mouth E)
Butterfill, John


Atkinson, Peter (Hexham)
Carlisle, John (Luton North)


Baker, Rt Hon K. (Mole Valley)
Carlisle, Sir Kenneth (Lincoln)


Baker, Nicholas (Dorset North)
Carrington, Matthew


Baldry, Tony
Carttiss, Michael


Banks, Matthew (Southport)
Cash, William


Banks, Robert (Harrogate)
Channon, Rt Hon Paul


Bates, Michael
Churchill, Mr


Batiste, Spencer
Clappison, James


Bellingham, Henry
Clark, Dr Michael (Rochford)


Bendall, Vivian
Clarke, Rt Hon Kenneth (Ruclif)


Beresford, Sir Paul
Clifton-Brown, Geoffrey


Biffen, Rt Hon John
Coe, Sebastian


Blackburn, Dr John G.
Congdon, David


Body, Sir Richard
Conway, Derek


Bonsor, Sir Nicholas
Coombs, Anthony (Wyre For'st)


Booth, Hartley
Coombs, Simon (Swindon)


Boswell, Tim
Cope, Rt Hon Sir John


Bottomley, Peter (Eltham)
Couchman, James


Bottomley, Rt Hon Virginia
Cran, James


Bowden, Sir Andrew
Currie, Mrs Edwina (S D'by'ire)


Bowis, John
Curry, David (Skipton &amp; Ripon)


Boyson, Rt Hon Sir Rhodes
Davies, Quentin (Stamford)






Davis, David (Boothferry)
Jessel, Toby


Day, Stephen
Johnson Smith, Sir Geoffrey


Deva, Nirj Joseph
Jones, Gwilym (Cardiff N)


Devlin, Tim
Jones, Robert B. (W Hertfdshr)


Dicks, Terry
Jopling, Rt Hon Michael


Dorrell, Stephen
Kellett-Bowman, Dame Elaine


Douglas-Hamilton, Lord James
Key, Robert


Dover, Den
King, Rt Hon Tom


Duncan, Alan
Knapman, Roger


Duncan-Smith, Iain
Knight, Mrs Angela (Erewash)


Dunn, Bob
Knight, Greg (Derby N)


Durant, Sir Anthony
Knox, Sir David


Dykes, Hugh
Kynoch, George (Kincardine)


Eggar, Tim
Lait, Mrs Jacqui


Elletson, Harold
Lamont, Rt Hon Norman


Emery, Rt Hon Sir Peter
Lang, Rt Hon Ian


Evans, David (Welwyn Hatfield)
Lawrence, Sir Ivan


Evans, Jonathan (Brecon)
Legg, Barry


Evans, Nigel (Ribble Valley)
Leigh, Edward


Evans, Roger (Monmouth)
Lennox-Boyd, Mark


Evennett, David
Lester, Jim (Broxtowe)


Faber, David
Lidington, David


Fabricant, Michael
Lightbown, David


Fairbairn, Sir Nicholas
Lilley, Rt Hon Peter


Field, Barry (Isle of Wight)
Lloyd, Rt Hon Peter (Fareham)


Fishburn, Dudley
Lord, Michael


Forman, Nigel
Luff, Peter


Forsyth, Michael (Stirling)
Lyell, Rt Hon Sir Nicholas


Forth, Eric
MacGregor, Rt Hon John


Fowler, Rt Hon Sir Norman
MacKay, Andrew


Fox, Dr Liam (Woodspring)
Maclean, David


Fox, Sir Marcus (Shipley)
McLoughlin, Patrick


Freeman, Rt Hon Roger
McNair-Wilson, Sir Patrick


French, Douglas
Madel, Sir David


Fry, Sir Peter
Maitland, Lady Olga


Gale, Roger
Malone, Gerald


Gallie, Phil
Mans, Keith


Gardiner, Sir George
Marland, Paul


Garel-Jones, Rt Hon Tristan
Marlow, Tony


Garnier, Edward
Marshall, John (Hendon S)


Gill, Christopher
Martin, David (Portsmouth S)


Goodson-Wickes, Dr Charles
Mates, Michael


Gorman, Mrs Teresa
Mawhinney, Rt Hon Dr Brian


Gorst, Sir John
Mellor, Rt Hon David


Grant, Sir A. (Cambs SW)
Merchant, Piers


Greenway, Harry (Ealing N)
Mitchell, Andrew (Gedling)


Greenway, John (Ryedale)
Mitchell, Sir David (Hants NW)


Griffiths, Peter (Portsmouth, N)
Moate, Sir Roger


Grylls, Sir Michael
Monro, Sir Hector


Gummer, Rt Hon John Selwyn
Moss, Malcolm


Hague, William
Needham, Rt Hon Richard


Hamilton, Rt Hon Sir Archie
Nelson, Anthony


Hamilton, Neil (Tatton)
Neubert, Sir Michael


Hampson, Dr Keith
Newton, Rt Hon Tony


Hanley, Jeremy
Nicholls, Patrick


Hannam, Sir John
Nicholson, David (Taunton)


Hargreaves, Andrew
Nicholson, Emma (Devon West)


Harris, David
Norris, Steve


Haselhurst, Alan
Onslow, Rt Hon Sir Cranley


Hawkins, Nick
Oppenheim, Phillip


Hawksley, Warren
Ottaway, Richard


Hayes, Jerry
Paice, James


Heald, Oliver
Patnick, Irvine


Heathcoat-Amory, David
Patten, Rt Hon John


Hendry, Charles
Pattie, Rt Hon Sir Geoffrey


Higgins, Rt Hon Sir Terence L.
Pawsey, James


Hill, James (Southampton Test)
Peacock, Mrs Elizabeth


Hogg, Rt Hon Douglas (G'tham)
Pickles, Eric


Horam, John
Porter, Barry (Wirral S)


Hordern, Rt Hon Sir Peter
Porter, David (Waveney)


Howard, Rt Hon Michael
Portillo, Rt Hon Michael


Howarth, Alan (Strat'rd-on-A)
Powell, William (Corby)


Howell, Rt Hon David (G'dford)
Rathbone, Tim


Howell, Sir Ralph (N Norfolk)
Redwood, Rt Hon John


Hughes Robert G. (Harrow W)
Renton, Rt Hon Tim


Hunt, Sir John (Ravensbourne)
Richards, Rod


Hunter, Andrew
Riddick, Graham


Jack, Michael
Rifkind, Rt Hon. Malcolm


Jackson, Robert (Wantage)
Robathan, Andrew


Jenkin, Bernard
Roberts, Rt Hon Sir Wyn





Robertson, Raymond (Ab'd'n S)
Taylor, Sir Teddy (Southend, E)


Robinson, Mark (Somerton)
Temple-Morris, Peter


Roe, Mrs Marion (Broxbourne)
Thomason, Roy


Rowe, Andrew (Mid Kent)
Thompson, Sir Donald (C'er V)


Rumbold, Rt Hon Dame Angela
Thompson, Patrick (Norwich N)


Ryder, Rt Hon Richard
Thornton, Sir Malcolm


Sackville, Tom
Thurnham, Peter


Sainsbury, Rt Hon Tim
Townend, John (Bridlington)


Scott, Rt Hon Nicholas
Townsend, Cyril D. (Bexl'yh'th)


Shaw, David (Dover)
Tracey, Richard


Shaw, Sir Giles (Pudsey)
Tredinnick, David


Shephard, Rt Hon Gillian
Trend, Michael


Shepherd, Colin (Hereford)
Trotter, Neville


Shersby, Michael
Twinn, Dr Ian


Sims, Roger
Vaughan, Sir Gerard


Skeet, Sir Trevor
Viggers, Peter


Smith, Sir Dudley (Warwick)
Waldegrave, Rt Hon William


Smith, Tim (Beaconsfield)
Walden, George


Soames, Nicholas
Walker, Bill (N Tayside)


Speed, Sir Keith
Wardle, Charles (Bexhill)


Spencer, Sir Derek
Waterson, Nigel


Spicer, Sir James (W Dorset)
Watts, John


Spicer, Michael (S Worcs)
Wells, Bowen


Spink, Dr Robert
Wheeler, Rt Hon Sir John


Spring, Richard
Whitney, Ray


Sproat, Iain
Whittingdale, John


Squire, Robin (Hornchurch)
Wiggin, Sir Jerry


Stanley, Rt Hon Sir John
Wilkinson, John


Steen, Anthony
Willetts, David


Stephen, Michael
Wilshire, David


Stern, Michael
Wolfson, Mark


Stewart, Allan
Wood, Timothy


Streeter, Gary
Yeo, Tim


Sumberg, David
Young, Rt Hon Sir George


Sweeney, Walter



Sykes, John
Tellers for the Ayes:


Tapsell, Sir Peter
Mr. Sydney Chapman and


Taylor, Ian (Esher)
Mr. Timothy Kirkhope.


Taylor, John M. (Solihull)



NOES


Abbott, Ms Diane
Clelland, David


Adams, Mrs Irene
Clwyd, Mrs Ann


Ainger, Nick
Coffey, Ann


Allen, Graham
Cohen, Harry


Armstrong, Hilary
Connarty, Michael


Austin-Walker, John
Cook, Frank (Stockton N)


Banks, Tony (Newham NW)
Cook, Robin (Livingston)


Barnes, Harry
Corbett, Robin


Barron, Kevin
Corbyn, Jeremy


Battle, John
Corston, Ms Jean


Bayley, Hugh
Cousins, Jim


Beith, Rt Hon A. J.
Cox, Tom


Bell, Stuart
Cunliffe, Lawrence


Benn, Rt Hon Tony
Cunningham, Jim (Covy SE)


Bennett, Andrew F.
Cunningham, Rt Hon Dr John


Bermingham, Gerald
Darling, Alistair


Berry, Roger
Davidson, Ian


Blunkett, David
Davies, Bryan (Oldham C'tral)


Boateng, Paul
Davies, Ron (Caerphilly)


Boyes, Roland
Davis, Terry (B'ham, H'dge H'l)


Bradley, Keith
Denham, John


Bray, Dr Jeremy
Dewar, Donald


Brown, Gordon (Dunfermline E)
Dixon, Don


Brown, N. (N'c'tle upon Tyne E)
Dobson, Frank


Burden, Richard
Donohoe, Brian H.


Byers, Stephen
Dunwoody, Mrs Gwyneth


Caborn, Richard
Eastham, Ken


Callaghan, Jim
Enright, Derek


Campbell, Mrs Anne (C'bridge)
Evans, John (St Helens N)


Campbell, Ronnie (Blyth V)
Ewing, Mrs Margaret


Campbell-Savours, D. N.
Fatchett, Derek


Canavan, Dennis
Faulds, Andrew


Cann, Jamie
Field, Frank (Birkenhead)


Chisholm, Malcolm
Fisher, Mark


Church, Judith
Flynn, Paul


Clapham, Michael
Foster, Rt Hon Derek


Clark, Dr David (South Shields)
Foulkes, George


Clarke, Eric (Midlothian)
Fraser, John


Clarke, Tom (Monklands W)
Fyfe, Maria






Galloway, George
Madden, Max


Gapes, Mike
Mahon, Alice


Garrett, John
Mandelson, Peter


George, Bruce
Marek, Dr John


Gerrard, Neil
Marshall, David (Shettleston)


Gilbert, Rt Hon Dr John
Marshall, Jim (Leicester, S)


Godman, Dr Norman A.
Martin, Michael J. (Springburn)


Godsiff, Roger
Martlew, Eric


Golding, Mrs Llin
Maxton, John


Graham, Thomas
Meacher, Michael


Grant, Bernie (Tottenham)
Meale, Alan


Griffiths, Nigel (Edinburgh S)
Michael, Alun


Griffiths, Win (Bridgend)
Michie, Bill (Sheffield Heeley)


Grocott, Bruce
Milburn, Alan


Gunnell, John
Miller, Andrew


Hain, Peter
Mitchell, Austin (Gt Grimsby)


Hall, Mike
Moonie, Dr Lewis


Hanson, David
Morgan, Rhodri


Hardy, Peter
Morley, Elliot


Harman, Ms Harriet
Morris, Rt Hon A. (Wy'nshawe)


Harvey, Nick
Morris, Estelle (B'ham Yardley)


Hattersley, Rt Hon Roy
Morris, Rt Hon J. (Aberavon)


Henderson, Doug
Mowlam, Marjorie


Heppell, John
Mudie, George


Hill, Keith (Streatham)
Mullin, Chris


Hinchliffe, David
Oakes, Rt Hon Gordon


Hodge, Margaret
O'Brien, Michael (N W'kshire)


Hoey, Kate
O'Brien, William (Normanton)


Hogg, Norman (Cumbernauld)
O'Hara, Edward


Home Robertson, John
Olner, William


Hoon, Geoffrey
O'Neill, Martin


Howarth, George (Knowsley N)
Orme, Rt Hon Stanley


Howells, Dr. Kim (Pontypridd)
Parry, Robert


Hoyle, Doug
Patchett, Terry


Hughes, Kevin (Doncaster N)
Pendry, Tom


Hughes, Robert (Aberdeen N)
Pickthall, Colin


Hughes, Roy (Newport E)
Pike, Peter L.


Hutton, John
Pope, Greg


Illsley, Eric
Powell, Ray (Ogmore)


Ingram, Adam
Prentice, Ms Bridget (Lew'm E)


Jackson, Glenda (H'stead)
Prentice, Gordon (Pendle)


Jamieson, David
Purchase, Ken


Jones, Barry (Alyn and D'side)
Quin, Ms Joyce


Jones, Jon Owen (Cardiff C)
Radice, Giles


Jones, Lynne (B'ham S O)
Raynsford, Nick


Jones, Martyn (Clwyd, SW)
Redmond, Martin


Jowell, Tessa
Reid, Dr John


Kaufman, Rt Hon Gerald
Robinson, Geoffrey (Co'try NW)


Keen, Alan
Roche, Mrs. Barbara


Khabra, Piara S.
Rogers, Allan


Kilfedder, Sir James
Rooker, Jeff


Kilfoyle, Peter
Rooney, Terry


Kinnock, Rt Hon Neil (Islwyn)
Ross, Ernie (Dundee W)


Lestor, Joan (Eccles)
Rowlands, Ted


Lewis, Terry
Ruddock, Joan


Litherland, Robert
Salmond, Alex


Livingstone, Ken
Sedgemore, Brian


Lloyd, Tony (Stretford)
Sheerman, Barry


Llwyd, Elfyn
Sheldon, Rt Hon Robert


Loyden, Eddie
Short, Clare


McAllion, John
Simpson, Alan


McAvoy, Thomas
Skinner, Dennis


McCartney, Ian
Smith, Andrew (Oxford E)


Macdonald, Calum
Smith, Llew (Blaenau Gwent)


McFall, John
Snape, Peter


McKelvey, William
Soley, Clive


Mackinlay, Andrew
Spearing, Nigel


McLeish, Henry
Spellar, John


McMaster, Gordon
Squire, Rachel (Dunfermline W)


McNamara, Kevin
Steinberg, Gerry


MacShane, Denis
Stevenson, George





Strang, Dr. Gavin
Wicks, Malcolm


Straw, Jack
Wigley, Dafydd


Sutcliffe, Gerry
Williams, Rt Hon Alan (Sw'n W)


Taylor, Mrs Ann (Dewsbury)
Williams, Alan W (Carmarthen)


Thompson, Jack (Wansbeck)
Wilson, Brian


Timms, Stephen
Winnick, David


Tipping, Paddy
Wise, Audrey


Turner, Dennis
Worthington, Tony


Vaz, Keith
Wray, Jimmy


Walker, Rt Hon Sir Harold
Wright, Dr Tony


Walley, Joan
Young, David (Bolton SE)


Wardell, Gareth (Gower)



Wareing, Robert N
Tellers for the Noes:


Watson, Mike
Mr. Jim Dowd and


Welsh, Andrew
Mr. John Cummings.

Question accordingly agreed to.

MADAM SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House agrees with the Select Committee on Trade and Industry that the Post Office cannot be retained in its present form; therefore welcomes the publication of the Government's Green Paper on the future of postal services which acknowledges the need for greater commercial freedom for the Post Office and provides increased opportunities for sub-post offices; recognising the importance to communities of Post Office Counters and the Royal Mail, supports the Government's commitment to the universal service at a uniform and affordable tariff, with a nationwide network of post offices; condemns the approach that the only possible solution is 100 per cent. public ownership; and welcomes the opportunity of consultation on the range of options.

STATUTORY INSTRUMENTS, &c

Madam Speaker: With permission, I shall put together the motions relating to statutory instruments.

Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &amp;c.).

RATES (NORTHERN IRELAND)

That the draft Rates (Amendment) (Northern Ireland) Order 1994, which was laid before this House on 14th June, be approved.

CRIMINAL JUSTICE (NORTHERN IRELAND)

That the draft Criminal Justice (Northern Ireland) Order 1994, which was laid before this House on 14th June, be approved.

EUROPEAN MOLECULAR BIOLOGY LABORATORY

That the draft European Molecular Biology Laboratory (Immunities and Privileges) Order 1994, which was laid before this House on 21st June, be approved.—[Mr. Wood.]

Question agreed to.

EUROPEAN COMMUNITY DOCUMENTS

Motion, made and Question put forthwith pursuant to Standing Order No. 102(9) (European Standing Committees).

TRANS-EUROPEAN NETWORKS

That this House takes note of European Community Document No. 5475/94, relating to general rules for the granting of Community financial aid in the field of Trans-European Networks.—[Mr. Wood.]

Question agreed to.

Procedure

The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): I beg to move,
That—(1) Standing Order No. 37 (Procedure on divisions) be amended, in line 7, by leaving out 'this direction' and inserting 'the nomination of tellers';
(2) this House approves the Third Report of Session 1992–93 from the Select Committee on Procedure (House of Commons Paper No. 880 (1992–93)) so far as it relates to the printing of, and the presentation of, Private Members' Bills; and
(3) Standing Order No. 13 (Arrangement of public business) be amended, at the end, by adding—
'(12) An Order appointing a day for the second reading of a private Member's bill shall lapse at the rising of the House on the preceding sitting day if at that time the bill has not been printed and delivered to the Vote Office, and the House shall make no further order appointing a day for the second reading of the bill until it has been printed.'.

Madam Speaker: I have selected the amendment standing in the name of the right hon. Member for Hcniton (Sir P.Emery).

Mr. Newton: I shall try to be brief.
The three procedural questions that we are debating this evening all originate from recommendations from the Select Committee on Procedure. I am glad to have this further opportunity to express again the House's appreciation to my right hon Friend the Member for Honiton (Sir P.Emery), as Chairman of that Committee, and to his colleagues for their work.
The first paragraph of the motion, relating to Divisions, implements a recommendation from the Committee's second report of the 1991–92 Session. Standing Order No. 37 stipulates that at least six minutes should elapse before the occupant of the Chair orders the doors to the Division Lobby to be locked. The Committee thought this was anomalous, because for nearly 20 years a period of eight minutes has been allowed in order to give Members whose offices are in other buildings time to reach the Lobby.
The Committee also pointed to an ambiguity in the wording of the Standing Order, and the proposed amendment corrects both defects by remedying the anomaly and providing that the six minutes should run from the nomination of the Tellers. Two minutes from the calling of the Division to the appointment of Tellers, plus a further six minutes to the order to lock the doors continues to give a total of eight minutes. The amendment is therefore a helpful clarification of the Standing Order.
As you said, Madam Speaker, my right hon. Friend the Member for Honiton has also tabled an amendment and I must say, straightforwardly, that I speak with a bit more caution about it. The Standing Order provides that. two minutes after the Speaker's direction to clear the Lobby, she should put the Question again and then appoint Tellers. My right hon Friend's amendment would enable the Speaker, at her discretion, to appoint Tellers at any time within that period of two minutes. The second part of his amendment would ensure that the total period of time before the locking of the doors into the Division Lobby remained unchanged.
I acknowledge, of course, that, on a few occasions, my right hon Friend's proposal would allow Members to begin leaving the Lobby a little earlier than they can at present. The number of occasions on which it would be sensible to make use of this provision, however, is limited.
First, there would have to be no initial uncertainty about who the Tellers were to be. Secondly—perhaps this is the more important point—it would be necessary to ensure that the Division Clerks were on the spot. In practice, we are probably talking only about Divisions which are expected and which follow immediately after another Division.
We need to consider what might happen if Tellers were appointed, as could easily occur, before the Division Clerks were on the spot. Some of the places where Division Clerks may be on duty—for example, in Committee—are a considerable distance from the Chamber. It would be very difficult for them to get to the Lobby within the allotted two minutes. The failure to arrive in time, where Tellers had been appointed early, could aggravate the irritation caused to Members, and at the same time cause difficulty for the Clerks. Those are the points that some people have made.
We should also bear in mind the fact that such a provision would depend on an exercise of discretion by the Chair, which it is by no means clear that the Chair would wish to have. I have the Chair's authorisation to say that the Speaker has considerable reservations about the proposal. In practice, the Chair would find it very difficult to exercise that discretion. In those circumstances, where the gain to Members would be limited and fairly infrequent, we should at least think carefully before making such a change. I put those points before the House.
The second and third paragraphs of the motion which we are debating this evening relate to the Committee's third report of the previous Session. It is the practice of the House, for obvious reasons, not to give a Second Reading to a Bill which has not been printed. Many private Members' Bills are never printed—they may well have served the sponsor's purpose by giving him or her an opportunity to make a speech under the ten-minute rule.
That is not a criticism—the private Members' Bill is a perfectly legitimate political device, even if it is introduced with no serious expectation that it will be passed into law. As the Procedure Committee points out, however, on many Fridays the Order Paper contains the titles of a number of Bills which could not possibly make progress, but it is not apparent from the Order Paper which Bills those are.
The Committee has therefore recommended that, if a Bill is not printed by the rising of the House on the day before that on which it is set down for Second Reading, it should be dropped from the Order Paper and only revived when eventually printed. That in no way diminishes the rights of the Member promoting the Bill, because his Bill cannot in any case be read a Second Time until it has been printed, and as soon as it has been printed, he can revive the Bill and have set it down again for Second Reading. The third paragraph of the motion makes the necessary consequential change to Standing Orders.
The Procedure Committee's third report also considered what it regarded as a loophole in the rules, which allows a Member who has been refused leave to introduce a Bill under the ten-minute rule then to present substantially the same Bill from behind the Chair under Standing Order No. 58. A Bill with an identical long title cannot be presented from behind the Chair, but a Bill with only a marginally changed long title can.
The Committee's view was that that was an abuse, and recommended that the refusal by the House of leave to bring in a ten-minute Bill should be treated as the rejection of that Bill at a substantive stage, with the effect that a Bill with the same or a similar long title could not be presented


again in the same Session. If the House approves that part of the Committee's report, it will give effect to that recommendation.
I hope, in this rather hasty fashion, that I have given the House some flavour of the fact that these are modest and unspectacular but sensible modifications to our Standing Orders. With the reserved note that I have expressed about my right hon. Friend's amendment, I commend the motion to the House.

Sir Peter Emery: I beg to move, as an amendment to the motion, in paragraph (1), to leave out from 'amended' to the end of the paragraph, and insert
'in line 4, by leaving out "After the lapse of and inserting "Not more than", and in line 7, by leaving out "six minutes from this direction" and inserting "eight minutes from the direction to clear the lobby".'.
I thank my right hon. Friend the Leader of the House for arranging this debate, and for bringing forward two fairly small recommendations made by the Select Committee on Procedure, which have been waiting for debate for some time—since 1990–91 and 1991–92.
There are two factors relating to ensuring the eight minutes before a Division. We know that there is elasticity, in that Madam Speaker can elongate that time if she feels that it is necessary. That is not altered. The recommendation dealing with the publication of private Members' Bills follows the recommendation of the Committee, and I am delighted to see that the Government have brought that forward.
The motion has allowed me to table an amendment to follow a unanimous recommendation from the Procedure Committee, which is in paragraphs 18 to 26 of the third report of Session 1992–93 That report has been before the House for some time, so it is not new, and it has not been bounced on the House. I shall remind the House quickly of what the report says:
Standing Order No. 37 provides that two minutes shall be allowed after the Speaker…has put the question and called the division (by saying 'clear the lobby'), before the Speaker shall put the question again"—
that two minutes is absolute; it cannot be reduced—
If Members against shout 'Aye' and 'No', tellers are then appointed by the occupant of the Chair. When they take up their positions, the doors are unlocked
and the Division starts.
It goes on:
The Committee has considered whether the Chair should be given the discretion"—
it is not mandatory—
to reduce the period of two minutes on occasions when the names of tellers are available at the Chair in less than that time. It is not proposed that the overall time of at least eight minutes before the doors are locked should be reduced.
The second part of my amendment would ensure that that is the case.
The report goes on:
Such a change would appear to us to have the advantage that it may well enable Members to leave the division lobby up to a minute or more earlier at the start of a division. We believe that this would be especially helpful in divisions involving a large number of Members at predictable times such as seven or ten o'clock. It would also overcome the frustration felt by Members standing waiting for the counting of the division to begin.
On a number of occasions, I have heard hon. Members say, "How long are we waiting for?" It is like waiting for the kettle to boil.

Mr. David Winnick: The right hon. Gentleman made the point that the recommendations in the report were unanimous. Bearing in mind some of the recent difficulties that we have had on the Procedure Committee, we should be grateful for that.
Are not the last two Divisions an excellent example of what the right hon. Gentleman is saying, especially the second one? When we knew that there was to be a second Division, hon. Members were waiting to vote before going home, except those of us who are left in the Chamber. No harm would have come—the Tellers were obviously ready, and the Clerk was ready. There is no reason why the second Division could not have been done as we recommended.

Sir Peter Emery: The hon. Gentleman puts clearly the main point of the Committee's report. We continued:
We have sought evidence from the Government, Opposition and Liberal Democrat Chief Whips and from the Clerk of the House and the Serjeant at Arms. The evidence of the Clerk of the House and the Government Chief Whip is published with this report. The Serjeant at Arms told us that he had no objection to the proposal. No other replies were received.
We understand that tellers are not always ready until the full two minutes have elapsed after the division is first called and that this period does enable Members to make a final decision on whether to press a matter to a division. We also appreciate that the division clerks have to reach the lobbies from wherever in the building they are carrying out their duties. If the two minute period is reduced, it may not always be possible for the clerks to get to their desks before the tellers get to the doors. On balance, we do not think these factors will apply in the circumstances when the House would most benefit from the Chair having discretion to appoint tellers earlier, namely when
there are several Divisions, as was rightly pointed out by the hon. Member for Walsall, North (Mr. Winnick).
At present, the exit doors of the Division Lobbies are not unlocked by the Doorkeepers until two Clerks and two Tellers are in position. We do not propose to alter that arrangement.
We therefore believe that the occupant of the Chair should be given discretion to put the question the second time once the names of the tellers have been supplied to the Clerks at the Table at any point up to a maximum of two minutes".

Ms Joan Walley: Has the right hon. Gentleman sought the advice of the fire service on the health and safety considerations involved when doors are locked for so long between Divisions?

Sir Peter Emery: I am torpedoed. The answer is no, we have not. We did not think this matter one for the fire service, I must openly admit.
We take no powers away from the Chair. We do not insist that the Chair act in any particular way. All the amendment does is give the Chair the right to call the second Division in a shorter time. That would allow Members not to have to stand waiting in the Lobby while the Tellers—[Interruption.] Does the hon. Member for Jarrow (Mr. Dixon) wish to get to his feet and intervene?

Madam Speaker: Order. The hon. Gentleman had better make his comments standing up, or they will not be recorded.

Sir Peter Emery: That is what I was trying to suggest, Madam Speaker.
We are trying to help Back Benchers by ensuring that they are not in the Lobbies longer than necessary. This power, we believe, should be given to the Chair. I urge the House to accept the amendment.

Amendment agreed to.

Main Question, as amended, agreed to.

Resolved,
That—(1) Standing Order No. 37 (Procedure on divisions) be amended, in line 4, by leaving out "After the lapse of" and inserting "Not more than", and in line 7, by leaving out "six minutes from this direction" and inserting "eight minutes from the direction to clear the lobby".
(2) this House approves the Third Report of Session 1992–93 from the Select Committee on Procedure (House of Commons Paper No. 880 (1992–93)) so far as it relates to the printing of, and the presentation of, Private Members' Bills; and
(3) Standing Order No. 13 (Arrangement of public business) be amended, at the end, by adding—
'(12) An Order appointing a day for the second reading of a private Member's bill shall lapse at the rising of the House on the preceding sitting day if at that time the bill has not been printed and delivered to the Vote Office, and the House shall make no further order appointing a day for the second reading of the bill until it has been printed.'.

Catering Committee (Reports)

Mr. Colin Shepherd: I beg to move,
That this House approves the First Report from the Catering Committee of Session 1993–94, on Refreshment Services for the House of Commons (House of Commons Paper No. 75), and the First Report from the Catering Committee of Session 1992–93, on Refreshment Provision for Line of Route Visitors (House of Commons Paper No. 307).
I am pleased to propose the motion to approve the two reports, representing between them nearly two years' work by the Catering Committee. I thank my colleagues on the Committee for the assiduous way in which they have tackled the two inquiries and for the spirit of co-operation that has prevailed throughout. I should also like to express our thanks to all those who helped in the preparation of the reports—and especially to the Director of Catering Services and her staff, who unfailingly and efficiently assisted the Committee throughout our inquiries, to the Parliamentary Works Directorate for its assistance, and to the various consultants who provided specialist advice.
I shall concentrate first on the major report of the Committee, which is an in-depth study of the long-term catering needs of Members of the House and other Refreshment Department users, and which examines the need to move towards compliance with health, hygiene and safety at work legislation, in line with the policy of the House authorities.
In the course of our inquiry we received evidence, written and oral, from Members, from the trade union side of the Whitley Committee, from the Secretaries and Assistants Council and from the Parliamentary Press Gallery. One of the purposes of our inquiry was to increase the safety of Refreshment Department staff, and we took evidence from the Hotel and Catering Workers Union. That was in addition to meetings, on and off the record, with the various consultants and others. The Committee is enormously grateful to the Members and other witnesses who contributed to the inquiry.
It became obvious to the Committee at an early stage in our inquiry that simply tackling the problem of seeking to comply with the relevant legislation would be time consuming and costly—not to mention the need to remedy the effects of what might politely be called deferred maintenance. It was also obvious to the Committee that doing nothing was not an option. Indeed, a specialist in environmental health said in evidence:
an in-depth inspection by an EHO from Westminster City Council would result in at best an improvement notice or at worst a prohibition notice being served.
Hon. Members may recall the difficulties that were experienced in another place a few years ago, when there was an incidence of salmonella. That resulted in a complete refurbishment of the kitchens on what can only be described as a crash basis, with lack of time spent on site investigation and planning, leading to a massive overrun of cash and of time. Luckily, in that case there were no long-term serious effects from the illness, but the Committee feels that there is a substantial risk that a similar or even worse instance could occur here at any time, and the risk of a serious accident to Refreshment Department staff is also ever-present.
Having concluded that rapid action was necessary to attempt to remedy the worst defects, the Committee determined to take a strategic view of what should be


provided; it did so with the aid of a food service consultant's report, which was then progressed by a team of architects who refined the proposals to offer practical solutions that would not have adverse effects on this historic building.
The report that the House is being asked to approve is a result of the various deliberations that followed. Some detailed planning has yet to be done, but I shall highlight the main changes that we propose.
From a health and safety point of view, probably the worst area, and the most urgently in need of improvement, is the kitchen servicing Members' and Strangers' cafeterias. Refurbishment of that area, which was initially planned for 1992, was postponed because we were advised that the refurbishment that was planned would not solve the inadequacies of the kitchen. Under the Committee's plan, the cafeterias would be enlarged and converted into one large cafeteria, with dedicated seating for Members. The kitchen would be moved from its present position to the area below the Tea Room that is currently occupied by Annie's Bar and other domestic offices. That would provide greatly increased capacity and a safer, cleaner, more efficient kitchen, with proper ventilation capability.
The Members' Tea Room is another area that fills the consultants with anxiety for both customers and staff. Indeed, they suggested that there should be a great reduction in the number of menu items, and one thread that ran through the evidence that we took was that that suggestion would meet with a strong rejection. I have to declare an interest as a regular user of the Tea Room—I think that you are too, Mr. Deputy Speaker—and say that the unique nature of the service that one receives is something to be closely protected. That is not to say that improvements cannot and should not be made, particularly to the quality of the food and beverages provided there. The Committee therefore set out to find a solution to the conundrum.
The proposed solution is an example of why the strategic approach adopted by the Committee is, in our view, the best way to solve the various problems, and we do not consider that it would be feasible to select projects from within the package of proposals. With the change of position of the Members' and Strangers' cafeteria kitchen, it will be possible to provide a proper service to the Members' Tea Room which is directly above it. Thus it should be possible to eliminate the long and inefficient counter which some consider is also unsightly, and to eliminate the long queues which many of us experience when we only want a quick cup of tea. The change would give more space for Members without any significant change to the range of items currently offered.
If the House approves our proposals, several consequential changes will be necessary. We propose that the Lady Members' Room, which is situated on the other side of the main Terrace entrance to the Strangers' Bar should be relocated to allow an enlarged Strangers' Bar to be created in its stead. We recommend that the present staff bar should become Annie's Bar. It will also be necessary to change the location of the barber's and to close part of the north curtain corridor. Perhaps I should again declare an interest and say that this proposed closure is regrettable to those of us who have offices in that area. However, the plans provide for alternative access to the affected areas.
As these consequential changes affect accommodation that is not currently occupied by the Refreshment Department and involve substantial work, I expect that the hon. Member for Ogmore (Mr. Powell), the Chairman of the Select Committee on Accommodation and Works, may seek to speak in the debate. I met the members of that Committee on two occasions to explain the proposals of the Select Committee on Catering.
The other consequential change which has a connection with the other reports that we are debating is to the souvenir shop. The success of souvenir sales and the location of the shop have led to continual overcrowding and lack of space for stock. Our proposal is to create a self-contained shop close to the present position and available to pass holders only. Our proposals for visitors are contained in our other report, to which I shall refer shortly.
As well as these major changes involving substantial alterations to our front-of-house facilities, the problem of compliance with legislation has led us to propose a complete rebuilding of the central kitchen located on the ground and principal floors. That rebuilding will enable a total reorganisation of the kitchen that services the Members' and Strangers' Dining Rooms and the private dining facilities in order to avoid the major risk of cross-contamination of food that currently occurs in this area.
These changes are many and a little difficult to visualise, but reference to our report, copies of which are in the Vote Office, should clarify our proposals. The changes will enable the problem of the staff changing rooms to be addressed at the same time. Those have been the subject of much concern for many years; earlier proposals were shelved because if they had been adopted the money spent would have been wasted.
Those are the Committee's major proposals. There are others in the report that time will not allow me to comment upon in detail. Perhaps I could highlight two. My first comment is on the Members' and Strangers' Dining Rooms. We heard in evidence that at lunch time the Members' Dining Room, which has a capacity of 120, served an average of only 21 covers, while next door the Strangers' Dining Room is regularly over-subscribed. The Committee proposes that for a trial period of 12 months the Members' and Strangers' Dining Rooms should be exchanged at lunch time only. At the end of that trial period I expect my Committee to review the situation and receive representations from hon. Members.
The Committee proposes in its report that the dispense bar for Members and Strangers' Dining Rooms be relocated so as to allow the principal floor corridor with its elegant stone vaulted ceiling to be opened up. When the Select Committee on Finance and Services considered our report, it felt that that was an unnecessary expense at this time. I understand that my right hon. Friend the Member for Southend, West (Mr. Channon), who is the Chairman of that Committee, will seek to speak later in the debate. As hon. Members would expect, the examination by that Committee was thorough.
To keep the cost of the redevelopment to a minimum, my Committee had already made several reductions, including the deletion of a proposal for a new wine bar. In addition. the Committee has looked carefully at the programme of works to ensure that the most dangerous


areas are tackled first, but proposes that the work should be phased over several years. That, too, will assist in spreading the financial load.
Another aspect should be borne in mind when costs are being considered. There will be those inside and outside the House who will accuse us of extravagance. Those who would make those allegations should be reminded that there are at least 3,700 people entitled to use Refreshment Department facilities, many of whom are expected to work very long or unsocial hours. Hon. Members, in addition to working long hours, do not often have the option of eating elsewhere because of the demands of parliamentary business. My Committee therefore makes no apology for proposing measures that will protect all those who eat here, while in the process making improvements to our refreshment services.
The main element of the cost is in making the structural changes necessary so that proper kitchens and other domestic offices can be installed. To that end, we already have in the kitty some £2.5 million, which will be used to offset some of the costs. That money comes from accrued surpluses from the trading accounts over the pass: few years.
If our proposals are adopted, many years of under-investment, resulting in potential hazard to customers and Refreshment Department staff, will be corrected, resulting in a healthier, safer position for everyone. The Refreshment Department will be able to meet the provisions of the relevant legislation that has been approved by Parliament as appropriate for the rest of the population. At the same time, the existing facilities will, for the most part, be retained or improved. In the case of the Members and Strangers' cafeterias, an increase in the seating capacity and an improvement in the quality of food will result.
Those who press the case for the continuation of Annie's Bar and for formal lunches in the Members' Dining Room will have the opportunity to demonstrate the need. The Members' Tea Room will continue to offer broadly the same choice of food as at present in improved surroundings and with shorter queues at peak times, especially for those requiring only beverages.
The other report on which the House is being asked to express a view relates to refreshment provision for Line-of-Route visitors. We received many representations about the appalling lack of refreshment facilities for visitors, some 100,000 of whom tour the Line of Route every year. In addition, Members, their staff and staff of the House frequently receive visitors and it would be advantageous to make light refreshments available for those visitors to purchase.
The Committee is also aware of the overcrowding that often occurs around the existing souvenir kiosk when Members' parties ask to make the necessary detour to that busy area. We took evidence in the inquiry from Members, consultants, the Serjeant at Arms, the Public Information Officer and the Education Officer. We also received memorandums from many Members and others. Again, we are most grateful for the contributions of all concerned.
The Committee considered the various options, including the use of the former St. Stephen's tavern, which is situated at the corner of the phase I parliamentary building. We did not consider the former tavern to be suitable for the purpose because of its location but,

together with colleagues on the Accommodation and Works Committee, we intend to review its use as the phase 2 parliamentary building nears completion.
We are of the opinion that the best long-term solution is to convert the present Westminster Hall cafeteria into a visitors' centre, which as well as offering light refreshments would include toilet facilities and a souvenir kiosk selling a range of items more appropriate to visitors, including school parties. The cafeteria is well located at the end of the Line of Route and exit could be arranged so that visitors could rejoin the current public exit route through the carriage gates.
Although the Committee identified the problem as needing early attention, it was also aware of the continuing use, mainly by staff, of the cafeteria at lunchtime. The other current overcrowded facilities available to staff would not be able to absorb those users. The Committee therefore proposes that the change should be made at the earliest opportunity after the additional capacity becomes available as a result of the redevelopment plan contained in our other report or, at the latest, when the refreshment facilities in phase 2 become available.
In the meantime, there is the continuing problem of the overcrowding of the souvenir kiosk area. As a temporary measure, the Committee concluded that a suitably attractive temporary kiosk should be erected in the north-east corner of Westminster Hall until the visitors' centre became available. Although that proposal might seem controversial to some, I remind the House that, until about 100 years ago, this historic place saw all manner of activities. One witness said that it was not always the "solemn, gloomy cavern" that it is today. The Committee recommends, therefore, a temporary course of action for the consideration of the House.
The House has a rare opportunity tonight to take a long-term view of its future need for refreshment services. The reports, taken together—bearing in mind the refreshment provision contained in the phase 2 new parliamentary building—propose a long-term strategy that will remedy the past lack of maintenance, bring the House towards compliance with legislation in accordance with its policy and provide vastly improved facilities for Members, staff and visitors alike.
The reports were agreed unanimously by the Committee and I commend them to the House.

Mr. Jim Callaghan: A former friend of mine inherited his father's shop. In renovating the premises he noticed that the front step was badly worn. Being a thrifty man, he decided to dig up the step and turn it over to use the unworn part and so save money. However, when he dug up the step, he discovered that his equally thrifty father had already taken the same action. The moral is that sometimes, for all one's thrift, it is necessary to spend money to renovate and replace equipment for good safety reasons.
There is a parallel with the story that I have recounted, and that is the necessary refurbishment of the refreshment services. When we consider the facilities offered by the Refreshment Department, it is obvious that much of the kitchen equipment is old, inefficient and scheduled for replacement. Premises are dilapidated, do not reach the standard required by current legislation and are generally inadequate for the number of customers.
The number of people using the Department on a daily basis is as follows: Members, 651; Officers, 150; staff, 942; Members' staff and research assistants, 1,300; security staff, 500; and workmen, 180. That is a total of 3,723. But as there are about 10,000 security passes in circulation, the number of customers is far greater than 3,700. In addition, there are about 800 visitors a day. There are also contractors—the number is variable—and banqueting guests.
Apart from the demands of increasing numbers of customers, the past 20 years during which I have been a Member have seen immense changes in the areas that impact on the Refreshment Department. For example, there have been tremendous changes in people's eating habits—styles of food, menu and diet. There have been changes also in working hours, styles of service in employee catering, modern technology and value for money.
With the increasing number of customers and their demands, it can be seen that the pressure on accommodation has meant that there has been limited opportunity to expand refreshment facilities in line with the increase in refreshment requirements of the potential users.
Reports in 1966–67, 19967–68 and 1978–79 concentrated on financial and operational matters and services tended to develop in a piecemeal way. At the same time changes in people's eating habits and expectations led to an expansion in the range and variety of food demand. That meant that existing resources had to be adapted in an ad hoc manner.
With all those changes, the Committee decided to undertake a wide-ranging inquiry into the services provided by the Department. It sought to assess whether the health and safety, hygiene, fire and ventilation standards are being properly met. The Committee had to bear in mind the fact that in the past piecemeal changes, such as the refurbishment of obsolete equipment, did not deal with the underlying problems. Nor did they provide a cost-efficient solution. Instead, the Committee had to bear in mind the importance of remedying the effects of years of deferred maintenance and modernising and of reordering the kitchens to ensure greater safety and efficiency.
The Committee was satisfied that a longer-term policy was required, while taking into account the Palace of Westminster's status as a grade I listed building, limitations on space and the need to provide services that can respond to flexible demand. The Committee decided to make recommendations for a programme of necessary and in some cases urgent work, to be phased over a period of years to avoid disruption and excessive peaks of expenditure.
Accordingly, the Committee commissioned two surveys. The first, from Food Service Associates (Henley) Ltd., included an extensive study of the existing Refreshment Department and made substantial suggestions for change. The second report was from Winton Food Management Service, which specialises in the hygiene and safety aspects of catering. In view of the urgency of some recommendations, the Committee agreed as early as 15 July 1992 to purchase immediately refrigeration equipment.
The Winton report commented that an in-depth inspection by an environmental health officer would result at best in the serving of an improvement notice or at worst—I want the House to remember this—a prohibition notice, which would result in the relevant areas being closed until remedial works had been undertaken.

Mr. Michael Stephen: When was the last time that a Member of Parliament, or anybody else, contracted food poisoning or was injured by fire in the Palace of Westminster?

Mr. Callaghan: There was an outbreak of salmonella poisoning in the House of Lords a year or two ago. That is what we are afraid of—that a disaster is waiting to happen.

Ms Joan Walley: Does my hon. Friend agree that it is a question not of reported cases of food poisoning? We do not know the extent to which people become ill as a consequence of food eaten here, insanitary arrangements, and lack of compliance with health and safety and food hygiene standards in the kitchens of the House.

Mr. Callaghan: I agree.
The Committee took oral and written evidence from a wide range of opinion. Witnesses included Members of Parliament, staff, members of the Parliamentary Press Gallery, and Whitley Committee and trade union representatives. It became clear to the Committee that compliance with relevant hygiene and safety legislation was necessary.
We heard from Food Service Associates at the start of the oral evidence that doing nothing was not an option. The Committee accepts that there is no alternative but urgent and effective action to ensure that relevant health, hygiene and safety standards are met in Refreshment Department outlets.

Mr. Anthony Steen: The hon. Gentleman mentioned an environmental health officer, but am I correct in thinking that no such officer came to the Palace or made a report?

Mr. Callaghan: The hon. Gentleman is absolutely correct. Outside consultants said that if environmental officers came to the House—which they cannot, because it is Crown property—they might close the place down.
If those standards are not met, we shall encounter the same problems as arose in the House of Lords kitchen some years ago. It was clear from evidence presented to the Committee that the area most in need of urgent attention is the Members and Strangers cafeteria. Another area that will require upgrading is the principal kitchen. Other areas urgently needing attention are the Churchill Room, the Press Gallery kitchens and the Westminster Hall cafeteria.
However, major works in the House can be undertaken only during the summer recess. So we recommend a redevelopment plan over six years, under which the modernisation of the Refreshment Department will be phased in. The Strangers and Members cafeterias will be treated as a top priority.
Under our recommendations for a phased approach, the cost of the work would be similarly spread, so that it would not take a disproportionate share of the works budget in any one year. The provision of such funds is therefore a matter for decision by the House of Commons


Commission on the basis of recommendations from the Finance and Services Committee after a debate to enable the House to express its views.
The implementation of our report is not a matter for the members of our Committee. We have simply drawn attention to what needs to be done. We are concerned that emergency unplanned expenditure under crisis conditions would lead to uncontrollable costs—but I ask the House to remember that doing nothing is not an option.
In recommending the report to the House, I congratulate the Chairman of the Committee, its members and the officers who served it. I also congratulate all the witnesses who helped the Committee to produce such a detailed and sensible report.

Several hon. Members: rose—

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. Before I call other hon. Members to speak I should point out that the debate will finish at 12.13. Apart from the two Front-Bench Members, six other hon. Members want to catch my eye, and if hon. Members give their co-operation, all six may be successful.

Mr. Paul Channon: As my hon. Friend the Member for Hereford (Mr. Shepherd) said, I speak on behalf of the Finance and Services Committee—and I shall speak only for a few minutes, Mr. Deputy Speaker. Hon. Members who have taken the trouble to find out already know the Committee's views, because we published our minutes a short while ago.
I pay tribute to my hon. Friend the Member for Hereford and his Committee for their excellent work in producing the two reports, and to the Director of Catering Services and the Director of Works and their staffs for the enormous support that they have given to the Catering Committee and to my Committee in the course of several discussions on that important topic. I must also say how much I agree with every word spoken by the hon. Member for Heywood and Middleton (Mr. Callaghan), who made a powerful case in favour of the changes.
Many hon. Members have said this, and it is in danger of becoming a cliché, but the first thing that the House must understand is that we cannot do nothing. There is a very urgent requirement to take action in line with hygiene and health and safety legislation. My hon. Friend the Member for Hereford will correct me if I am wrong, but I understand that the Refreshment Department has nine kitchens and more than 300 staff. We have a duty to ensure that its staff work in a safe environment and that the meals produced here—last year there were about 1 million of them—are not at risk from health hazards.

Mr. Stephen: My right hon. Friend will be aware that the taxpayer would have to produce a very large sum to finance the schemes, if they are approved. On the evidence that we have been given concerning an outbreak of salmonella in the House of Lords some years ago, is he really satisfied that that level of expenditure is really necessary?

Mr. Channon: Reluctantly, I must tell my hon. Friend that we are. Naturally, when the Finance and Services Committee first considered the report and its major proposals, we took it with a pinch of salt, if I may use that

expression. However, the more we investigated, the clearer it became that it was essential that something radical be done.
I shall deal with all the points that my hon. Friend raised, and the first thing to say is that we operate as if we were covered by legislation. It is our policy, in the end—perhaps not too far ahead—to remove the immunity from health and safety legislation that we currently possess. It must remain a reasonable aim for the House of Commons to ensure that our facilities reach the standards that we have required others to adopt, under legislation that we have voted for—certainly I have voted for it—in the past.
Secondly, if we are to undertake such major changes we must have a strategic approach. Will they be introduced as a logical scheme or not? I think that, for the first time, the consultants and the architects have planned a logical scheme. No doubt there are differences of detail, which can be debated later, and can be changed. And colleagues can make their views clear tonight. But we must have an overall solution and not introduce piecemeal measures that will be much more wasteful and cause just as much disruption and a great deal of extravagance and not solve the problem.
I regret saying it, but, in the light of the deferring of maintenance during the past few years, we cannot delay the schemes any longer. Schemes, costing some £2 million, have been put off recently until a comprehensive plan could be agreed. It is extremely difficult to undertake works in the Palace which will not cost a lot of money. In a grade 1 building of this kind it is vital to respect the quality of the building during such work.
We are also hampered by the need to do most of the work during the summer recess. When else can it be done? Such constraints are familiar to the hon. Member for Ogmore (Mr. Powell), who may seek to catch your eye, Mr. Deputy Speaker, and the members of his Committee, who compile the 10-year rolling programme of works. They need to be associated in the decisions that have to be made annually.
If the House wants to go ahead with the programme, we shall look carefully at each year's works programme when we prepare the estimates. We shall also use the £2.5 million trading surplus from the Catering Committee to reduce the total cost to public funds. The projects can be funded within the normal scale of financial provision for the works vote.
My hon. Friend the Member for Hereford raised two points of detail with which I shall deal briefly. The first was the question of the dispense bar. My Committee is not at all sure that the proposal for that is a good idea. Nevertheless, we shall reconsider it when the overall proposals are re-examined. It is quite expensive and there may be other objections to it as well. We do not have a closed mind, but we are suspicious.
The souvenir kiosk is a matter for the authorities that control Westminster Hall. It is not a matter for my Committee. The first figures for such a kiosk were vast. I am glad that they have been substantially reduced, although it is not cheap even now. However, I do see merits in making better provision for Line of Route visitors, and I accept the target of creating a visitors centre in the space now used by the Westminster Hall cafeteria. But that project needs a great deal of work before final plans can come forward.

Mr. Steen: My right hon. Friend said that the work could be contained within the normal vote for repairs to the Palace. Can he give the House some idea of what we are talking about in terms of annual expenditure?

Mr. Channon: Yes. I would mislead the House if I went into that in too much detail. I shall write to my hon. Friend if he would like. I have here the expenditure for the House of Commons works votes and the total costs will not vary considerably if the proposals are taken forward. I assume that my hon. Friend is in favour of the proposals, as he was a member of the Committee, was present when the Committee deliberated on the matter and voted in favour of the report. I take what he says as a constructive statement in support of the Committee's proposals.
My final point relates to the Refreshment Department. In the past 10 years a great deal has been done. We have a new and effective management team and an excellent staff, and the operation to deliver the services has become much larger. There are now 31 outlets spread over three sites.
My Committee will continue to monitor the Department's financial performance, and our aim is to support it in its aim to provide good food at reasonable prices to those who have to be here. We are gradually transferring costs from the House vote to the trading operation and setting sharper financial targets. If we are to improve standards further, we have to rebuild the kitchens and reorder some of the outlets.
I accept the arguments put forward by my hon. Friend. I congratulate the Director of Catering Services and her staff and my hon. Friend and his Committee. They deserve the support of the House on the two reports that the Committee has produced. The House has no practical alternative but to accept the reports tonight.

Mr. Ray Powell: I shall be brief because I know that several other hon. Members wish to participate.
I congratulate the hon. Member for Hereford (Mr. Shepherd) and his Committee on the two reports that they have produced and the time that they have spent doing so. On numerous occasions, my hon. Friend the Member for Jarrow (Mr. Dixon) has had to excuse himself for two or three hours to attend the Catering Committee. Likewise, I have had to attend the Accommodation and Works Committee. I receive a lot of support from members of my Committee and I am sure that the hon. Member for Hereford receives tremendous support from his Committee members, although I may be more fortunate than he in that I hear no dissenting voices after my Committee has presented its reports.
I thank the Chairman of the Select Committee on Finance and Services for his work in trying to accommodate all the reports from the Catering Committee. While we are all in the mood for congratulating and thanking people, I should like to take perhaps the only opportunity that we are afforded in the House to thank Committee members, who serve the interests of all hon. Members and who undertake a task that is distinct from their jobs as constituency Members of Parliament and their pursuit of a political career. They serve the House and do the job voluntarily. No one even offers them £1,000 for tabling questions.
I have found out about the work that the Catering Committee has already completed and I have read its

reports and proposals. Hon. Members are in the House a lot of the time and spend many hours here. When we go to the Refreshment Department for our meals, we expect them to be adequate and facilities to be readily available, and we should be assured that hygiene is given top priority. Some hon. Members have voiced disquiet over the fact that the Refreshment Department would probably have been closed a long time ago if it were an outside catering organisation. We should appreciate what the Committee are doing to try to improve that position.
In many ways, the exercise promoted by the Catering Committee in both reports on refreshment services is not unlike the task that my Committee faces whenever it is asked to justify the expenditure of public money on improvements to the fabric of this fine Victorian palace. Both Committees face some degree of criticism due to the lack of understanding of two major factors.
First, it is the duty of the domestic Committees and the House of Commons Commission, in the context of a responsible, co-ordinated and planned set of programmes, to reduce the backlog of refurbishment work that has built up over many years, and to provide hon. Members and staff who have to work in these buildings with the essential minimum health and safety standards that would be taken for granted in many public buildings and commercial enterprises. Secondly, it must be recognised that the twin demands of the need to meet the stringent quality requirements of a historic, listed building and to undertake work without disruption to Parliament and its Committees add a premium to the work that is carried out.
I compliment the Director of Works and the Director of Catering Services on their efforts to tailor their major refurbishment and deep-servicing programmes into the period of the recesses. That is even more difficult when, as nowadays, so many hon. Members and staff continue their work throughout the recesses.
At one time, as soon as the recess started, House officials had far more opportunity to work because most of them were unoccupied and hon. Members had gone on holiday or to their constituencies. Today, when one comes back during the recess for a week or a fortnight, one finds that hon. Members may not be here, but the staff usually are. As a result, that poses further problems for hon. Members, the Director of Works and others.
On the second report, the time is long overdue when the House should be expected to provide visitors with some sort of refreshment when they come here. Many of our constituents, some of them disabled, travel for many miles and several hours to see their Member of Parliament and to visit the House. It is no more than common decency that they should be able to rest and have a cup of tea in decent surroundings, instead of being rudely tipped out into the street at the end of their visit.
Some weeks ago, a party of schoolchildren from my constituency visited the House. At 1 pm, when we had finished the tour, the children had to leave Westminster Hall and go out into the rain because there was nowhere in the House for them to have a sandwich or a cup of tea before returning at 2.15 to see the Speaker's procession and try to obtain tickets for the Strangers Gallery.
That does not only happen to my constituents; it happens every day of the week to hon. Members who receive visitors. That is deplorable. We visit Parliaments in other countries and see what they offer—particularly the Canberra Parliament, which has a new building. The Government there encourage children to visit the building


and see democracy at work. If we want to encourage young people to know what democracy and Parliament are all about, it is high time that we provided decent facilities for visiting constituents.
I do not want to go into the details of all the proposals. As the hon. Member for Hereford will know, my Committee has studied them in depth, and they have been adequately covered in the speeches of other hon. Members—particularly that of my hon. Friend the Member for Heywood and Middleton (Mr. Callaghan), who is a member of the Catering Committee, and the speech of the Chairman of the Committee himself. My Committee, however, is aware of the effect of the proposed changes on accommodation. I suggest full consultation with those whose accommodation or facilities would be affected, and careful consideration should be given to the views of English Heritage and those in whom control of Westminster Hall is vested before a temporary souvenir kiosk is introduced into that historic part of the building.
The report mentions staff changing rooms. I have often talked to staff, especially the catering staff downstairs. They have no rest room, and they have to go into the toilets to change their clothes. This country has the mother of Parliaments; yet where in the world could we find another Parliament that does not even provide facilities for staff to change their clothes? In fact, we have now converted rooms in the area to give staff such facilities, but they still need a rest room. They should have at least as many facilities here as they would have outside; at present, they have far fewer facilities.
I mentioned alternative accommodation for Members. We know what happens once a Member is moved out of accommodation that he has enjoyed for 10, 15 or 20 years, especially if he could step straight out on to the Terrace: that is a lovely location. There could also be problems for those who frequently use Annie's Bar and the Strangers Bar; indeed, the changes in that regard have already prompted criticisms. My Committee, however, unanimously approved those changes, considering them reasonable, and I believe that they will lead to a major improvement.

Mr. Alan Haselhurst: It is a great pleasure for me to speak soon after the hon. Member for Heywood and Middleton (Mr. Callaghan). We have both been Members of Parliament for 17 years, although at one stage he displaced me in the part of his constituency that we once shared. Now we find ourselves participating in the same debate, and very much on the same side. I very much endorse his remarks. I echo his tribute to my hon. Friend the Member for Hereford (Mr. Shepherd) for the unruffled way in which my hon. Friend undertakes the thankless job, in a sense, of being Chairman of the Select Committee on Catering. As Chairman, he is therefore often the main target for brickbats which come his way from any disgruntled person who did not perhaps like his previous meal.
Our great difficulty in addressing the subject is that we are open to the charge that we appear to be recommending the expenditure of a large sum of money. There will be ready critics, certainly outside the House and, perhaps, some inside the House, who will ask how dare we suggest spending a large sum of money on ourselves. It needs to be emphasised, as has already been mentioned, that it is a

debate about facilities not for 651 Members of Parliament, but for many thousands of people—the 3,000 people who work here in addition to Members of Parliament and the many more thousands of people who visit in the course of the year. We have a responsibility which goes beyond trying to ensure that there is some sort of basic standard of luxury for Members of Parliament. It should extend to ensuring that there is a decent standard of provision for all the people who work here in whatever capacity and also for, those who visit.
My hon. Friend the Member for Shoreham (Mr. Stephen) has sounded a warning of the concerns which, of course, we should feel. It would be reprehensible if it could be shown that we were behaving in a cavalier fashion and were apparently prepared to put the pen to a cheque for a very large sum of taxpayers' money for apparently frivolous purposes. I have certainly been convinced from our work in Committee that the proposed provision is not a frivolous purpose.
The difficulty with which the Committee was faced in trying to address the problems first stemmed from the nature of the Palace itself. It is not possible to imagine that Sir Charles Barry or those who instructed him could have known that, 140 years later, the Palace would be used so heavily. If we were to adjust this fine building to the needs which confront us, we would be involved in making changes to the fabric which would be, of necessity, more expensive than if were playing around with a more modern building or if we were simply starting from a blank sheet of paper. So that there are inherent extra costs in almost anything that one seeks to do to change the arrangements in the Palace.
We are, of course, catering for very much greater numbers than ever could have been envisaged when the basic design of the Palace was undertaken. So we would be trying to superimpose in this magnificent building substantial new requirements which would be very difficult to accomplish, certainly at minimal expenditure. There is also what may be called the domino effect when we start to make changes in the confines with which we are presented. For example, if we say that we must have proper provision for the receipt of raw materials of food and the consequence is that something is moved down the line, further changes come about, which help to cause the expenditure to mount.
Those were some of the practical difficulties with which the Committee was faced. It was not an attempt to find out how we could have a bonanza, but an attempt to meet minimum requirements. I defend resolutely the fact that we must make changes in the House which conform with the standards that we have imposed on everyone else outside the Palace of Westminster. We have not invented those standards for ourselves. We have a responsibility when proposing the expenditure of money to ensure that the people who come to this place should be as safe and as secure as we expect them to be anywhere else.

Dr. Robert Spink: I have listened carefully to my hon. Friend; he has put some sound and rational arguments. Nevertheless, does he not accept that we can move only at a certain speed without incurring the wrath of the public and that we have to be sensitive to what they will think? Perhaps a more phased approach to the changes would be appropriate.

Mr. Haselhurst: We have done very little for 40 years. That is pretty good phasing. When we now come to an accumulated problem, we are still saying, for all sorts of practical reasons and for reasons of financial responsibility, that we should still phase the changes over a number of years. We can look our electors and taxpayers in the eye and say that we are not embarking on a madcap scheme. There is an accumulation of work that needs to be done within this fine building. We have a responsibility to the building and to those who will enjoy it in the future to do something now, having refrained from doing anything over a number of years. We have avoided, it could be said, some of the responsibilities that we have imposed on other people.
The other problem is that we have a balance of needs for which to cater. That has been borne in on me since I have had the honour to be a member of the Catering Committee. We have 651 Members of Parliament who have very strong views. It is the 651 Members of Parliament who will make decisions about whether certain things are done. However, we must think about all the other people who have a great interest in what happens to the catering services of this building.
We have seen in the evidence given to the Committee some very idiosyncratic views which have been put forward with great passion, as one might imagine, from elected representatives of the people. However, there are many other people who may have the same strength of view and who certainly have great strength of numbers. We must think of them. The Palace is not just for Members of Parliament, although we are entitled, while the public give us the privilege of being here, to have the enjoyment of those facilities. We have a responsibility to those who work for us—those who work for the nation in maintaining this Palace—to ensure that facilities are provided.
It is a matter of balance. We cannot get it right by saying, "Oh, this area of the Palace must be a facility for Members of Parliament; forget the rest." When one has to try to balance the needs of Members' staff, visitors and Members themselves, one gets into awful difficulties when one is in a confined arrangement. We do not have excess space that we can freely dispose of, in this direction and that direction, to cater for all needs. The proposals for the consideration of the House tonight are very carefully balanced to try to give something to everybody and to ensure that we maintain standards for all.
I refer briefly to St. Stephen's tavern. I am tempted to adopt the words of Sir Winston Churchill—that it is
a riddle wrapped in a mystery inside an enigma.
So it has seemed to all the bodies of the House that have had to consider what should happen to St. Stephen's tavern. We were quite right to knock on the head the possibility of its being a visitors' centre. I am sure that the proposals that we are putting before the House are much more practical and I hope that they can be fulfilled in time. I also hope, however, that we shall not lightly dispense with the idea of St. Stephen's tavern. It is the possible expansion chamber for our needs, particularly if we are sensitive to the needs of staff if we take hold of the Westminster Hall cafeteria for a visitors' centre at some stage. We must be sure that we have sufficient cafeteria space and bar space for our staff. Perhaps St. Stephen's tavern would provide that opportunity.
Finally—and I hope not frivolously—I refer to the possibility of having a kiosk in Westminster Hall. I must take as many visitors round this Palace as any other hon.

Member does and I take delight in encouraging my constituents to come to the Palace of Westminster. I passionately believe that we should open this place as much as possible to the people who put us here. A visit to the Dutch Parliament by the Catering Committee made us realise how poor we are in presenting ourselves to visitors. We can do much better, but there are limitations that the Palace imposes upon us.
Something that gives great delight to visitors is the opportunity to buy some little souvenir of their visit to the Palace. None of us should underestimate the thrill that people feel about visiting the Palace. I will own, without, I hope, being silly, to feeling a thrill about being here anyway, as an hon. Member. The thrill is all the greater for our constituents, who may visit the Palace just once in their lives. We should give them the opportunity to make a simple purchase. That may seem trivial, but it is important.
We all know that the current kiosk is situated out of place for the needs of the many people whom we have the pleasure to escort around the building. Logic dictates that there should be something at the end of the tour and the end of the tour, logically and inescapably, is Westminster Hall. We must take a broad view about its use, bearing in mind, as my hon. Friend the Member for Hereford said, that its history is colourful. It has embraced a great many functions, not least as a market stall site, so, as a temporary measure, we should not eschew the idea of providing a facility there for visitors to buy souvenirs.
I agree with my hon. Friend the Member for Shoreham that we should be rightly concerned that we are not frivolous in our expenditure of money. In the same breath, we should acknowledge that if we expose those thousand or more visitors a day to the possibility of the simple pleasure of purchasing a souvenir at the Palace, that will help the finances of the operation. That will tend to reduce the taxpayers' burden for all that we seek to provide.
I honestly believe that we can tell the public that we are not being frivolous. Yes, there is a large price tag attached, but it has been thought through. The proposals are an attempt to represent the needs of all the people who use the Palace, not least the public. We owe it not just to ourselves and to all who work and visit here, but to future generations to make some sensible decisions and to get on with it.

Ms Joan Walley: I will be brief because I know that other hon. Members want to speak.
I know from personal experience what a thankless task it is serving on the Catering Committee. I therefore congratulate the Committee's Chairman, the hon. Member for Hereford (Mr. Shepherd), and other hon. Members on their work. Some progress has been made given that we are debating the report.
We have heard a lot about whether spending money on essential work is wasteful. If the Government were prepared to pass legislation to remove Crown immunity—I have been promised that by Ministers in answers to parliamentary questions—we would not be having a debate on whether it is right to spend a certain amount to bring the House up to the standards that comply with existing health and safety legislation which applies to the rest of the country. I hope that the Leader of the House will acknowledge that the Government are prepared to


introduce such legislation, because it would then be as clear as clear could be that the money has to be spent, otherwise we will have to pay a high price.
As has been said, we must remember that we are talking not just about the Members who work here but about our staff, the Officers of the House and the thousands of people who visit this place on special occasions to lobby their Member of Parliament. I hope that the Leader of the House will take note of that.
If we complied with existing health and safety legislation, I would never see another mouse in the Pugin Room, as I did a couple of weeks ago. There is a mouse in the House and that is unacceptable. This Victorian Palace is completely outdated and our kitchens would be closed down if the Crown immunity legislation was enforced. We must spend the money necessary to bring the House up to an acceptable standard.
I return to the issue of environmental health officers. I have no doubt, from incidents in which I have been involved, that, if Westminster were prepared to allow environmental health officers to visit and carry out inspections, this place would be closed down—and closed down from tomorrow, never mind anything else.

Mr. Stephen: Does the hon. Lady agree that many catering establishments throughout the country are absurdly and grossly overregulated, and that many of them have been forced out of business by the oppressive bureaucracy which goes with the regulations?

Ms Walley: I speak as vice-president of the Institution of Environmental Health Officers, although I have no pecuniary interest to declare. I must tell the hon. Member for Shoreham (Mr. Stephen) that two wrongs do not make a right. People who visit this place are entitled to expect high standards, and we should be leading the way.
Let me raise another couple of health and safety issues. It is an outrage that the staff employed by the Catering Committee do not yet have all the facilities which they should have, and which the law requires staff elsewhere to have. The fact that they do not have proper rest room accommodation—that they must go down to the ladies' toilets and lock themselves in the toilet for a lengthy period if they want a cigarette, and also go there to change—is unacceptable. It is something which we could change if we were prepared to undertake a comprehensive review of the accommodation in this place; we could give these issues the top priority that they deserve.
As for the small matter of whether we could perhaps change and reorder the different facilities that we have, frankly, I am disappointed that the report does not address the banqueting facilities. I believe that our constituents have a right to come and visit us and lobby us. As we have heard, they want to come and look round the building: they want to see this important Palace, which is so rich in history. When my constituents travel down from Stoke-on-Trent, it is difficult for them to find toilet facilities, never mind a basic cup of tea. I resent the fact that we have all those banqueting rooms which can be booked at great expense, yet constituents who come down to participate in the democratic process do not have access to basic facilities. I would like to see that matter addressed. I am pleased that there is some reference to remedying that with regard to the so-called policemen's cafeteria in

Westminster Hall, and the changes that could be made there. However, I am disappointed that we have no time scale for that.
I have a sense of déjà vu from my days on the Catering Committee: we are talking about exactly the same issues three, four or five years on. Although we have some proposals which could, in the fullness of time and subject to this and that, bring about some change, we do not have any firm guarantees. I must tell the Chairman of the Catering Committee that I would like a firm guarantee that our constituents, rather than all the activities that take place in the banqueting rooms, will be given priority.

Dr. Spink: What about the money that that brings in?

Ms Walley: Regardless of what the hon. Gentleman says about bringing in money, I think that my constituents who are not able to pay £35 for a special lunch have as much right to visit this place as those who pay huge amounts of money.
Finally, I turn to the issue of St. Stephen's tavern. I have long advocated that that building should be seen as part of the Westminster complex—it should be seen as part of the Palace. I do not know the best use for that building. I have always taken the view that it is a place where schoolchildren, groups of pensioners and groups of constituents could go. I see from the report that my recommendation has not been accepted, and I am disappointed about that. But I still feel strongly that, given all the demands for extra accommodation, not least day care, creche and child care facilities for the thousands of people who work here, we should keep St. Stephen's. We should send not only the Catering Committee but the Accommodation and Works Sub-Committee, or whatever it is called these days in its revamped form, on some sort of exercise; it could come back with positive proposals for St. Stephen's so that we can start to address the lack of facilities. Then the whole thing would slot into place.
I appreciate that time is brief, so I shall confine myself to those few points at this stage.

Mr. Anthony Steen: I am proud to be one of the seven members of the Catering Committee. I recognise that many of the myriad kitchens that we have are antiquated and that most of them need an injection of funds. The only question is: how much money is needed, and where should it come from?
Do we really need an army of staff and caterers on the payroll—more than 300 of them—to provide the catering in the Commons? Or should we do something different, and not cater under our own flag for the police, the security staff, the researchers, the secretarial staff, Officers of the House and Library staff?
The reports are thorough, and I pay tribute to the Committee's Chairman. But I do not believe that we have yet dealt with the problem of how to pay for its chief recommendations.
Conservative Members are committed to deregulation and contracting out. We insist that local authorities privatise and open their services to competition, but we do not do that here in the Palace of Westminster. It is a closed public monopoly, paid for by the taxpayer. Instead of contracting out our canteens and cafeterias, as the British Airports Authority does so successfully at Heathrow, we insist on keeping control and paying an army of staff—of


whom we are proud and who serve us well. We really should consider alternative ways of operating our catering establishments.
At Heathrow the catering outlets were losing a mint before Sir John Egan arrived to do the splendid job that he does. He said, "We are airport operators, not caterers." Here at Westminster, we are legislators, not caterers. Sir John cleared the available space at Heathrow, and then said to certain well-known outlets, "Why don't you come in and put in all the equipment you need? You pay for it, and operate your business here free of charge and rent. In return for the franchise, we will share the profits with you." I believe that the BAA takes about 20 per cent. of the profits.
Amazingly, the many catering outlets at Heathrow now make enormous profits, and are open 24 hours a day, every day of the year.

Mr. Roger Gale: No, they are not.

Mr. Steen: If my hon. Friend wants to intervene, I shall give way. If not, perhaps he will let me continue.

Mr. Haselhurst: Is my hon. Friend seriously suggesting that a combination of Dunkin Donuts and Burger King would satisfy hon. Members of this House?

Mr. Steen: We do not have to go for those chains. There is a wide variety of outlets at Heathrow, including wonderful Italian restaurants, health food restaurants and other restaurants declared by Egon Ronay to be among the best in Britain. I do not know whether my hon. Friend considers him a good judge of quality, but I certainly do. We should consider the lead that has been given at the BAA in the context of this report.
The BAA has turned space that it ran at a loss—to encourage passengers to fly from Heathrow—into profitable outlets where millions of people enjoy the best food ever; and the BAA makes enormous profits as a result. Why not do something similar here, even if not in all our outlets? We may need to keep the Members' Dining Room and the Strangers' Dining Room, but why cannot outlets in some of the places occupied by canteens, such as the Churchill Room and the Press Restaurant, be contracted out?
There are many talented men—and women—on the Catering Committee. I hope that the members of the Catering Committee, rather than the officials, might choose some of the outlets. We might even taste the food. I have been a member of the Catering Committee for two years, and I am desperately waiting for the opportunity to speak about food, let alone taste it.
I would welcome an opportunity to contract out to private enterprise some of the canteen and cafeteria space. If I may say so to my right hon. Friend the Member for Southend, West (Mr. Channon), that would be a most sensible way of considering the funding of some of the expensive and important work in this very important Palace, which we could fund not through the public purse but through the private purse.

Mr. Stephen: Does my hon. Friend agree that the standard of catering in some of the cafeterias is sometimes appalling? Is there any reason why private sector caterers should not have an opportunity to show that they can do better?

Mr. Steen: I pay tribute to the work that is done by the staff in the Palace, in difficult circumstances, but it is also true that some of the tiny Italian cafés dotted around the capital produce magnificent food in space in which one could not even swing a cat. I have great difficulty in understanding why the quality that one can obtain in commercial outlets cannot be provided here, where we have much more space.
The Members' Tea Room is a good example of an enormous amount of space, yet it is always argued that we cannot improve the quality without new facilities. I question that. One does not always have to spend more money to produce the quality items. I agree that considerable work needs to be done in the Palace, but I question whether it must be funded from the public purse.
My idea is that the report might be accepted, with certain modifications, but that the way that it is funded should be considered. If we went down the route of privatisation and the contracting out of some of the outlets, there might be a 20 per cent. return of profits, which would be paid to the Exchequer, whereas at the moment we have to fund those outlets ourselves.
The food would also improve dramatically. We could have health food. We could have all the types of food that have been mentioned by Opposition Members as well as Conservative Members. The catering could be run commercially—not in house by our enormous work force.
I shall not discuss the phasing of that, which would need to be decided by the experts, but I am worried about the amount of money that the taxpayer is asked to pay to run the Palace, and that is one of the ways that we could find to inject funds from outside.
One criticism might be made about contracting out—that the Serjeant at Arms might well say that the question of security would prevent him from accepting that proposal. I believe that there are many ways round the question of security. I believe that the running of the Palace of Westminster can be done equally well if we inject private money and private enterprise. The Catering Committee's report is an important step in identifying the work that needs doing. I am sure that, with the Finance and Services Committee taking a new approach to funding, we can do that without any criticism from the taxpayer, and we can make great progress by bringing in the private sector.

Mr. Paul Flynn: Although I should like to be associated with all the congratulations that have been given to the Catering Committee, in the few minutes that are available to me I want to make an argument that has yet not been made, although to an extent it was mentioned by the hon. Member for Saffron Walden (Mr. Haselhurst) and my hon. Friends the Members for Ogmore (Mr. Powell) and for Stoke-on-Trent, North (Ms Walley). It is the alternative that I presented to the Catering Committee in a letter in October which I do not think has been given a great deal of consideration.
The groups that need our prime attention are those on the Line of Route, the 100,000 people who come to the House every year. When we decide, how can we put into some kind of hierarchy those who most deserve the resources of the organisation and those who least deserve them? We do not have the information. Although the suggestions about the Line of Route are worth while, we


are told that they will not be implemented for about six years, if then. There is an alternative that should be implemented.
We have all had the experience that thy hon. Friend the Member for Ogmore (Mr. Powell) so vividly described, and it is a disgrace that that continues. Prime attention should be given to those who have been neglected, the parties of schoolchildren and elderly people who come here. I suggested to the Catering Committee that the Line of Route be reordered so that it ends up on the Terrace where people might spend a few moments and then use the banqueting facilities there.
Information on who uses the banqueting facilities is a state secret, nobody knows. Over a number of years have asked, "Who are these people? Are they deserving groups? Are they cultural groups or charities?" An examination of the invitations that I have had showed that two out of 20 were charities and that the rest were either lobbyists or commercial organisations.
I tried another way of finding out which groups are entertained there. I asked for a breakdown of the political colour of the hon. Members who book those rooms and I was told that in 1991, Dining Rooms A and B were booked 1,566 times—1,399 times by Conservative Members and 167 times by Labour Members. That is 90 per cent. compared with 10 per cent. Although the letter was written many months ago and has nothing to do with recent events, it is interesting to note that there is an almost exact correlation in the two main parties between hon. Members with consultancies. Some 85 per cent. of Conservative Members who are eligible have outside consultancies and directorships, compared with 14 per cent. of Opposition Members.
That is the only information, and one is tempted to conclude from it that those banqueting rooms are used mainly for entertainment that is commercial in character. We know that some of it is political in character. I have informed an hon. Member that I intended to refer to an organisation that is declared in the Register of Members' Interests. It is called the Vivian Bendall Parliamentary Dinner Club and it exists for
functions sometimes held at the House of Commons, the financial benefits from which go to the Ilford North Conservative Association.
In 1991 there was a celebrated court case in which art hon. Member whom I have not informed was involved. His constituency chairman was a Mr. Andrew Mudd and it was claimed that American visitors paid for the privilege of entertainment in the Palace.
A limited amount of entertainment space is involved, and if we are to cater for the most deserving groups of people who come here in great numbers, there must be a loss. I urge the Catering Committee to consider again not the long-term reordering of Westminster Hall but eating into the banqueting facilities that are used by commercial organisations that could afford to pay for them.

Mr. Gale: The hon. Gentleman is treading a dangerous path. He should recognise that a large number of my hon. Friends book those rooms for entirely worthy charitable organisations for receptions that are attended by large numbers of Labour Members.

Mr. Flynn: I have made the point that I am aware of that, but I asked for transparency and I have not got it. In questions over a period of five years I have asked for a list of the organisations. That information is not divulged. All

that is available are the names of hon. Members, and that is all that I have to go on. If I believed that they were being hired by charities—[Interruption.] It is not true. Hon. Members would try other methods to find out. The atmosphere in the House, which has been vividly described by the press in the past few days, is of almost soft corruption. That has become part of the Palace of Westminster: soft corruption has become endemic here, and part of that is the use that is made of the banqueting facilities.

Mr. Nicholas Brown: I thank the hon. Member for Hereford (Mr. Shepherd) and the members of his Catering Sub-Committee for the report. I also thank the professional advisors to both the Catering Sub-Committee and the Finance and Services Committee.
The report is a substantial piece of work which deals comprehensively with a range of issues. The approach adopted by the Committee was the right one. It took evidence widely and then approached its task with vigour. It is the clearly expressed wish of the House to comply with hygiene legislation and, separately, with health and safety legislation as though that applied to the House prior to the removal of Crown immunity. Hence the concentration on the refurbishment of kitchen facilities set out so clearly in the report.
Times have changed for this Palace. There is an increase in the numbers working here and the way in which we do our jobs has changed. There are more full-time Members of Parliament, who are serviced by more full-time professional research staff. Hence there is more pressure on the catering facilities. The Committee has responded in the only way possible. Of course, there is a range of disputes about who can use what. My hon. Friend the Member for Heywood and Middleton (Mr. Callaghan) told us of the extent of the pressures on the facilities of the House. The key—frankly, the only answer—is to make adequate provision and that is clearly what the Committee set out to do.
I very much agree with my hon. Friend the Member for Ogmore (Mr. Powell), who said that we are talking about provision not just for ourselves and for those who work here, but for those who come to see us. We need to make provision for visitors to this place. I like the imaginative idea of a visitors' centre and I congratulate the Committee on it. It has dealt with the matter in the right way. I like the history of the building and I know that many visitors are enthralled by it. Of course there will be disagreements, of course it will not be easy to satisfy everyone, but I think that the Committee has done its best and in a way that is financially prudent as well as encapsulating the scope of all the issues that were in front of it.

The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): I suppose that I could be thought to be wearing a number of hats tonight—as a member of the House of Commons Commission and of the Finance and Services Committee and as Leader of the House. It is principally in the latter capacity that I felt it appropriate to say a few words.
I join hon. Members in the thanks expressed to my hon. Friend the Member for Hereford (Mr. Shepherd) and, indeed, the hard-working members of his Committee from


both sides of the House. It is an observable fact to anyone who has been here for more than a few years that the pressure on our refreshment facilities has been growing steadily and has put huge demands on people.
I want to place firmly on the record the fact that I think that Sue Harrison, the Director of Catering Services, and her staff have responded splendidly to those pressures against a background of very difficult circumstances. Even the most cursory tour of the facilities that lurk in the basement and behind the scenes—and I have done more than just a cursory tour—rapidly reveals that everything that they have achieved has been despite, not because of, the facilities with which they have to work. There must be a limit to what they can be expected to achieve, whether in quality or efficiency, in working conditions that often leave much to be desired—although that is putting it mildly—which border on the antique and which suffer from some of the deficiencies that my hon. Friend the Member for Hereford emphasised.
There has been a variety of piecemeal and ad hoc improvements over the years. The Catering Committee, after a great deal of very thorough work, has concluded that the problem now needs to be addressed more strategically with an overall modernisation plan, systematically planned and executed over about five or six years. I must say straightforwardly to the House that it would be difficult for anyone to say that, in principle, the Committee has not made an extremely strong case, not only in the interests of Members of Parliament but, as has been repeatedly emphasised, in the interests of staff and those who visit this building.
Within the structure of the domestic Committees as we now operate, if the House agrees the motion, the details of implementing the report will be a matter for decision by the Finance and Services Committee and the Commission. I welcome the remarks of my right hon. Friend the Chairman of the Finance and Services Committee. I agree that it is right that some of the earlier plans for refurbishment of the Refreshment Department have been postponed, so that some £2 million which would have gone on further short-term improvements, but without resolving the strategic problems, can now be applied to the strategic plan.
I also agree with my right hon. Friend that it is right for the £2.5 million trading surplus to be used to reduce what would otherwise be the cost to public funds. That is a legitimate concern, which some of my hon. Friends and others raised. I welcome my right hon. Friend's assurance that each year's expenditure will be looked at in the context of that particular year's Estimates, with the aim of finding the remainder of the funds for the project within the normal scale of financial provision of the works vote.
Against that background, I hope that the House will agree to my hon. Friend's motion.

Mr. Colin Shepherd: With the leave of the House, I thank my colleagues on the Catering Committee for their support during the debate. It is clear that there is much work for us yet to do in seeking to address the many concerns expressed tonight. We were already acutely aware of most of them, and I have no doubt that we will be bending our minds to them.
I see tonight's exercise, as does my right hon. Friend the Leader of the House, in the light of the Ibbs structure working, with the domestic Committees talking and working together and producing reports that are surveyed and analysed by the Finances and Services Committee, a report going to the Commission, and financially accountable action flowing as a consequence. That is an important improvement in the way that the House runs its affairs.
Because the House did not previously have a structure to the way that it ran its affairs, we had years of what I lightly called deferred maintenance—but I shall now call it botched, unstructured, ad hoc, non-maintenance. It led to a state of chaos below stairs and back of house, with everything in the wrong order and in the wrong place, and needing radical action.
The Committee was acutely aware of the need to be prudent, to phase, and to avoid the expenditure of hunks of money that would be indigestible in the way that the House is run—that it would all flow in a series of bite-size pieces that enable proper planning. One hazard of this building is that, once the structure is opened up, it is not clear what is there. That problem hit the House of Lords, where what started as a £3 million business ended up a £11 million business because no preparatory work was done. We wish to avoid that pitfall.
We will examine the Line of Route. The advice that we received was that, for security reasons, it is best to keep visitors on the Line of Route and away from the Terrace. We are acutely aware of the need to provide visitor facilities. As soon as the Members and Strangers cafeterias are completed and we deal with whoever lunches in the Westminster Hall cafeteria, we can provide those facilities. We need to crack ahead with the programme as quickly as possible, and then we shall have long overdue visitor facilities.
We shall continue the consultation for which the hon. Member for Ogmore (Mr. Powell) asked. We are consulting the Administration and Works Committee, and we shall examine the relocation of offices—

It being one and a half hours after commencement of proceedings on the Motion, Mr. DEPUTY SPEAKER put the Question, pursuant to Order [11 July.]

Question agreed to.

Resolved,
That this House approves the First Report from the Catering Committee of Session 1993–94, on Refreshment Services for the House of Commons (House of Commons Paper No. 75), and the First Report from the Catering Committee of Session 1992–93, on Refreshment Provision for Line of Route Visitors (House of Commons Paper No. 307).

Mr. Charles Edward Winter

Motion made, and Question proposed, That this House do now adjourn—[Mr. Arbuthnot.]

Mr. Tim Devlin: I wish to bring to the attention of the House the case of Mr. Charles Edward Winter. He is a constituent of mine who, on the face of it, has suffered over the past 12 years from a disturbing combination of incompetence, dishonesty, collusion and suppression of evidence, from 1985 to the present day. He has been as much the victim of circumstances as of malpractice on the part of a host of professionals to whom he went for help.
In 1981, Mr. Winter was a wealthy hotelier. He is now bankrupt. The circumstances of his bankruptcy have driven him to make rash threats against those whom he considers responsible for his present situation.
Mr. Winter owned the Queen's hotel in Bishopton lane, Stockton-on-Tees, with his second wife, Anne Barlow. It burned down in 1981, leaving Mr. Winter to pursue a long and involved insurance dispute. The final settlement fell far short of the value which he attached to the hotel. Furthermore, he feels that the accountant, John Chilton of Chipchase Manners, whom he instructed to deal with his claim, acted negligently. Indeed, Mr. Winter was awarded £100,000 damages against that man.
Similarly, Mr. Winter strongly believes that his legal representation in the matter—Robin Bloom of Jackson and Company—gave him wrong and harmful advice in respect of it and was therefore negligent. He also has a grievance against firms of solicitors—Paul Bennett of Punch Robson for allegedly suppressing legal evidence in the form of documents since 1982, and later Booth and Company in Leeds from 1985. He also alleges perjury on the part of Robin Bloom of Jackson and Company, who did not bring this written evidence to light until 1993.
Mr. Winter attributes his subsequent bankruptcy largely to a threefold negligence. First, he claims that the damages that he was awarded were insufficient and that the accountant, Mr. Chilton, gave him an untrue picture of his own means. He also transferred assets to his wife so as to reduce his legal liability. His house, which was apparently worth only £60,000 last year, when the matter was in the courts, is now advertised in the local newspaper at £300,000.
Secondly, the barrister who took Mr. Winter's case acted negligently in failing to apply for costs to be paid by Mr. Chilton and said that if Mr. Winter did not accept the situation he would make a recommendation to the legal aid board that Mr. Winter was being unreasonable, and his legal aid would be withdrawn.
Thirdly, there was the suppression of written evidence, which could have helped him between 1982 and 1993.
Mr. Winter believes that these three facts have contributed to his being made bankrupt, which he would otherwise have avoided.
From 1982 there followed a protracted period during which Mr. Winter sought justice on the points that I have described, as well as with regard to a large capital gains bill, which was disputed between himself and his second wife, from whom he had become estranged and whom he subsequently divorced in 1982.
To advise him on this latter point Mr. Winter instructed a separate firm of solicitors, Bolsover, Manning and Scott,

whose handling of his case he found to be far from satisfactory. Lacking all confidence in his legal representation in his divorce proceedings, he instructed a further set of solicitors—Punch Robson—to deal with matters relating to ancillary relief, and to ensure that the ex-Mrs. Winter met her side of their joint tax obligations in respect of the cash received on the insurance policy on the Queen's hotel. Incredibly, Mr. Winter has reason to believe that these solicitors—Punch Robson and Harvard and Company—acting for Ms Barlow, his ex-wife, acted in collusion rather than properly on his behalf, and that as a result they strung out the proceedings over 12 years, to the point where Mr. Winter was finally broken, financially and otherwise.
Over the course of these unfortunate events Mr. Winter has tried time and again to pull his life back together again. He has remarried and with his third wife, Linda, he has attempted a number of business ventures. But the cost and stress of his various actions has weighed heavily against him. Consequently he has remained largely unemployed and was declared bankrupt in February 1993, after spending £160,000 on solicitors' fees, being allowed to go into debt for £300,000 and having bankruptcy finally enforced upon him by the Inland Revenue. His losses now total over £1 million according to expert witnesses. He is also faced with the loss of the home he now lives in and the site of the Queen's hotel.
You will not be surprised, therefore, Mr. Deputy Speaker, to hear that these events have left Mr. Winter a very bitter man. He feels that, having paid so many professional people for advice, he should have received the correct advice and should have gone back into business fairly quickly. Instead, he is bankrupt. He has sought to resolve the matter for 11 years, writing to the ombudsman, to the solicitors' and barristers' complaints organisations and even to the European Court.
As a final cry for help, he resorted to threatening to kill Paul Bennett, John Chilton and Mr. Harvard, for which he was duly put on remand in custody for eight and a half months. When the matter came to court the judge, Mr. Justice Hannah, recognised the effect that the collusion of the solicitors had had on my constituent.
The purpose of this Adjournment debate is to bring the case of Mr. Winter to the attention of the House. Clearly there is little scope for intervention in the internal affairs of a self-regulating body such as the legal profession. However, I sincerely hope that all the relevant papers from all the firms to have had a hand in Mr. Winter's affairs can be placed before an independent representative of that profession for independent scrutiny. Those documents are all held by Mr. Winter's trustee in bankruptcy, and an eminent Queen's counsel is now being consulted.
I should like to press my hon. Friend the Financial Secretary and the Inland Revenue to review their decision to declare Mr. Winter bankrupt. I should also like them to reconsider the size of his capital gains tax bill. Perhaps in that light they will be able to give Mr. Winter an opportunity to restart in business, and thus to try to get back on his feet and start earning his own living. He has not been able to do that for the past 12 years.
The case is extremely complex. In summary, Mr. Winter seeks justice for himself in five ways. First, he would like the £55,000 that was paid to the Inland Revenue to be returned, plus interest backdated to 1989. Secondly, he would like the Queen's hotel site to be restored to his sole name. Thirdly, he feels that there should be a


guarantee that no enforcement proceedings will be lodged against his home, thus protecting himself and his new family from homelessness. Fourthly, he would like £160,000 worth of solicitors' fees back on the ground that all the solicitors whom he instructed failed in their duties on his behalf. Lastly, he would of course like the restoration of the £1 million loss that Ernst and Young and his property advisers, Storey Sons and Parker, estimated that he had suffered.
I am sorry to have to tell the House that my constituent has suffered severely from stress as a result of those protracted proceedings, and he is now in North Tees hospital suffering from pneumonia and a blood clot above his heart. That has been brought about by the stress of all the proceedings. I very much hope that Mr. Winter will soon be able to make a full recovery, and I am sure that that process will be greatly helped by anything that the Minister can say to comfort him this evening.

The Financial Secretary to the Treasury (Mr. Stephen Dorrell): I shall begin by picking up the last point made by my hon. Friend the Member for Stockton, South (Mr. Devlin). I am sure that the whole House would want to echo what he said about our good wishes for Mr. Winter's restoration to good physical health. The story that my hon. Friend has told is one with which we would all feel deep sympathy. Clearly it is an unhappy story in which a whole series of things have gone wrong with Mr. Winter's life. None of us could listen to it without feeling deep sympathy with him over the turn that his life has taken.
I have discussed Mr. Winter's case with my hon. Friend, and I know that he has taken a long-standing and deep interest in it. He has sought, not only in this debate but in correspondence with a wide range of interested bodies, such as the Inland Revenue and others, to argue that case to the best of his ability, and to offer Mr. Winter advice on how he might be able to improve the position in which he finds himself.
However, having said all that, I must confess that I find myself at some disadvantage in trying to suggest how I, as the Minister with direct responsibility for the Inland Revenue, can help in Mr. Winter's case. The reasons for that are various. Not the least of them is the fact that, as my hon. Friend will be well aware, the relationship between Ministers and the Inland Revenue does not allow a Minister to intervene directly in a particular taxpayer's affairs. The Inland Revenue is established by law as an independent body, and it is a responsibility of the commissioners of the Inland Revenue, not of the Minister responsible for the Department, to make individual decisions about specific taxpayer cases.
That being said, I have asked the Inland Revenue to review Mr. Winter's case once again in order to see whether anything can be done to alleviate the situation in which he finds himself. There is not much doubt in my mind—the judgment reached by the Inland Revenue confirms this—that the handling of the case from the narrow point of view of the Inland Revenue does not lend itself to any revision which could help Mr. Winter.
The circumstances are, as my hon. Friend has recounted, that, as a result of the fire in the hotel in

1981–82, an insurance claim was made by Mr. Winter which represented a substantially larger sum of money than the sum that he had originally paid for the hotel, with the result that, since it was not reinvested in the hotel or in a similar activity, no roll-over relief was available and a capital gains tax liability crystallised.
Mr. Winter appealed unsuccessfully against that assessment and the capital gains tax due was confirmed. I know that Mr. Winter feels—I have some sympathy with him—that if he had been properly advised at the time, he might have acted differently, with the result that the capital gains tax liability might not have crystallised. I accept that it is possible to think in retrospect of how different behaviour by Mr. Winter might have avoided the crystallisation of that tax liability, but the Inland Revenue cannot deal with what might have been; it has to deal within the law with what happened.
The fact of the matter is that Mr. Winter did not act in a way that allowed him to claim roll-over relief, so the tax liability crystallised, leaving the Inland Revenue with a statutory responsiblity to collect the tax due within the terms of the law. I emphasise that I understand how, in retrospect, it is possible to see how affairs might have been differently handled, but, from the point of view of the Inland Revenue, they were not differently handled and it had to deal with the facts as they were.
Then we come to what the Inland Revenue does when a tax liability has crystallised and it has the responsibility to collect it. The liability crystallised during the tax year 1981–82 and it was only earlier this year that the Inland Revenue took action which led ultimately to the bankruptcy of Mr. Winter. No one could conclude that the delay between 1981–82 and the ultimate action to provoke the bankruptcy of Mr. Winter earlier this year constituted anything other than very patient action by the Inland Revenue, reflecting the recognition on the part of its officials of the difficult circumstances in which Mr. Winter finds himself.
However, the task of the Inland Revenue is not merely to be sympathetic to an individual taxpayer, which it has been in this case, but to deliver its broader responsibilities to taxpayers in general to collect tax that is due from people whose actions have led to the crystallisation of a tax liability.
That is the circumstance in which the Inland Revenue finds itself in Mr. Winter's case and, therefore, it is difficult to argue that the Inland Revenue should have acted differently, either in dealing with the assessment of liability on the facts available, or in dealing with the collection of that liability in the difficult circumstances in which Mr. Winter finds himself.
We have considered Mr. Winter's circumstances in detail. We, and I am sure all hon. Members, feel considerable sympathy with him in the sad tale that my hon. Friend the Member for Stockton, South related, but I do not believe that any of the judgments that were reached by Revenue officials in the course of that story were wrong. Even if I did, it is not within the competence of a Minister to instruct or to lean on the Inland Revenue in its dealings with an individual taxpayer.
Having considered the matter, I conclude that the Inland Revenue acted reasonably and within the powers that are theirs and theirs alone to exercise. While I can offer my hon. Friend and, more pertinently, Mr. Winter sympathy on the position in which he finds himself, I cannot offer my


hon. Friend any prospect that the Inland Revenue will act differently or in a way that will alleviate the unfortunate position in which Mr. Winter finds himself.

Question put and agreed to

Adjourned accordingly at half-past Twelve midnight.